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Payless (USA) Awards Mexico, Indonesia, Malaysia and Singapore Rights

21 Oct 2010 - As part of its international growth strategy to expand the company's global footprint for all its brands and businesses, Collective Brands, Inc. announced that its Payless ShoeSource unit has signed two new franchise deals to bring the Payless retail chain to new international markets beginning next year, including opening Payless stores in Mexico, Indonesia, Malaysia and Singapore.

"We have seen a strong global appetite for our brands and the announcement of two new franchise partnerships to bring Payless to four new countries next year, including Indonesia, our largest franchise market to date, helps us expand our global footprint to better meet growing international demand," said Matt Rubel, chairman, chief executive officer and president of Collective Brands, Inc.

"The franchise model for Payless is proving to be a strong strategy for us as it accelerates our ability to place stores in new countries and with minimal capital investment. Payless brings the know how in footwear specialty retailing, and our franchise partners bring their strong infrastructure and experience in the local regions. These new partners are renowned in each market and we are thrilled to be working with them to bring Payless to more shoppers across the globe."

Payless Stores in Mexico
Payless ShoeSource has signed a multi-year franchise deal with Grupo Axo, a new strategic partner headquartered in Mexico City with more than 15 years of experience in the Mexican market, to bring the Payless retail chain to Mexico beginning late next year.

The two companies said they expect to open 41 stores in the next three years and that they believe the Mexican market can support more than 300 stores in the long term, with a strong potential to nearly double Payless' presence in Latin America, one of its fastest growing international markets. Additional terms were not disclosed.

"Mexico has a strong and growing economy with more than 100 million people who are interested in fashion and the latest trends, but want it at a great value," said LuAnn Via, CEO of Payless. "That's what Payless is all about. We democratize the latest fashion, design and ideas in footwear and accessory fashion for all to enjoy. And we are thrilled to partner with Grupo Axo to bring all that Payless has to offer to the people of Mexico."

Grupo Axo employs more than 1,100 associates and operates nearly 100 free-standing and mall stores and over 1,500 shop-in-shops and corners within major department stores. The company represents Benetton, Brooks Brothers, Brunelo Cucinelli, Coach, Emporio Armani, Etro, Guess, Marc Jacobs, Rapsodia, Thomas Pink and Tommy Hilfiger.

"Mexican customers are going to be surprised by Payless and what it has to offer: a fun, inspiring shopping experience with great brands, high-quality and affordable fashion products," said Alberto Fasja, co-president of Grupo Axo.

With strong determination, Andres Gomez, also co-president of Grupo Axo, added, "This is an important step within our global strategy, which consists of representing, operating and positioning internationally successful brands in our country. Collective Brands also owns the iconic brand, Keds, which has its sneaker product manufactured here in Leon. With this agreement, we're also promoting local jobs in store sales, construction and local store fixture manufacturing, which will help support the Mexican economy."

Payless Stores in Indonesia
Payless ShoeSource has signed another multi-year franchise deal with MAP ACTIVE, a division of public listed P.T. Mitra Adiperkasa tbk , the largest branded retail marketing company in Indonesia with over 700 stores ranging from Department stores to specialty retail concepts in Sports Fashion and Food & Beverage. Headquartered in Jakarta , MAP ACTIVE will bring Payless stores to Indonesia, Malaysia and Singapore in a long-term franchise deal that provides potential to exploit the maximum store growth possible.

The two companies announced the opening of 20 stores across the three territories in 2011, followed by an aggressive rollout of stores in 2012 and beyond. Indonesia -- Southeast Asia's largest economy with more than 240 million shoppers and a rapidly expanding middle class -- is Payless' largest franchise market opportunity to date.

"We are excited to partner with MAP ACTIVE to address the burgeoning Indonesia market with its significant population and its emerging economy. As well, Malaysia and Singapore have very strong and growing middle class economies, which are a good match for Payless," said Via. "We know that shoppers in these markets will appreciate our Payless brand promise."

MAP ACTIVE Chief Operating Officer, Michael Capper, said, "Our long term agreement with Payless ShoeSource gives us the confidence to maximize investments and tap the true shopper potential of Indonesia and the surrounding peninsula. Our partnership is well balanced. Payless will supply brand expertise and seasonal product collections, while MAP ACTIVE will unlock the market bottleneck to expose Payless to the necessary shopper scale that is so vital in emerging economies."
Collective Brands Inc.



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