Collective Brands to achieve rapid growth of premium brands

25
Oct '10

Collective Brands, Inc. held its annual Investor Conference for institutional investors and financial analysts. The Company presented its hybrid business model built on powerful brands that deliver innovative products that connect with consumers through multiple distribution channels including retail, wholesale, licensing and e-commerce. Management outlined growth plans in all areas of its businesses, highlighted by the most rapid growth in global wholesale brands and Payless international.

"We are focused on building dynamic, exciting and relevant brands with innovative products and delivering them to customers where and how they love to shop," said Matthew E. Rubel, chairman, chief executive officer and president of Collective Brands. "Our brands leverage a powerful, diversified global business model and infrastructure to generate strong cash flows, which enable us to grow shareholder value in a steady manner. We anticipate this business model will drive average earnings per share growth of 12-16% over the next three to five years."

Payless ShoeSource
Management articulated the keys to success at Payless are to drive the execution of its business strategy, including leveraging and expanding the Payless "House of Brands" strategy; delivering fresh, on-trend product; supporting brand and product stories with an integrated, aspirational marketing strategy; and providing an engaging, fun shopping experience.

Several programs were outlined to connect with expressive consumers, grow accessories and expand the children's business. Payless is leveraging the strength of existing brands such as Champion and designer label Christian Siriano for Payless by expanding into new product categories and broadening the brands' distribution. Payless is also expanding the Dexter brand with DexFlex, fusing comfort technologies with style for women, and launched its beauty collection in 1,500 stores in September 2010, which will expand to 3,000 stores late in 2011.

Internationally, Payless outlined expectations for continued growth including expansion in Latin America and entering new, emerging markets through franchising. Payless expects to open at least 80 franchise stores in nine countries in 2011, with opportunities to expand to 700 stores within five years and 1,400 stores long-term.

Collective Brands Performance + Lifestyle Group (PLG)
PLG continues to build momentum and is well-positioned for global growth, driven by each brand's strategy and unique marketplace position. The PLG brands -- Sperry Top-Sider, Saucony, Keds, and Stride Rite -- have clearly defined, consumer-driven distribution strategies to ensure that the premium products are sold through the right distribution channels and that each brand is focused on strategic execution, targeting investments in the areas of product innovation and technology to continue to drive growth.

Sperry Top-Sider is experiencing accelerating sales growth and market share gains through its evolution to a full performance and lifestyle brand by expanding beyond its core boat shoe business into more fashion and trend-driven product that appeals to the style savvy consumer, which has driven substantial growth in Sperry's women's business and men's casual business. The brand is also focusing on more innovative performance product through its Advanced Water Technology platform. Sperry will continue to expand its retail presence, as the five U.S.-based Sperry Top-Sider stores opened to date are exceeding expectations.

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