SOURCE: Collective Brands, Inc.

June 17, 2009 16:00 ET

Payless ShoeSource Opens Its First Store in United Arab Emirates

Payless Continues Its Middle Eastern Expansion With Fourth Store in the Region

TOPEKA, KS and AL AIN, UNITED ARAB EMIRATES--(Marketwire - June 17, 2009) - Payless ShoeSource, the largest specialty family footwear retailer in the western hemisphere, and its franchisee partner, M.H. Alshaya Co., the leading retailer in the region, today announced the grand opening of the first Payless ShoeSource store in the United Arab Emirates (UAE), with a 227-square-meter store located in Bawadi Mall, Al Ain.

"We are excited to continue our Payless store expansion in the Middle East with this first store in the UAE and our fourth in the region. The franchise model is working well for us, and we are very pleased to have such a tremendous franchisee in Alshaya," said Matt Rubel, Chairman, Chief Executive Officer and President of Collective Brands, Inc., which owns Payless ShoeSource. "We are thrilled to bring shoppers in the Middle East all that Payless has to offer -- great style, quality and brand names, all at a great price."

Through the franchise arrangement, Payless provides Alshaya with retail operations and merchandising expertise. Alshaya provides retail location strategy, construction, logistics, and store staffing. Alshaya will utilize Payless' newest store format, referred to as the "Hot Zone," and purchases Payless product directly from Payless' seasonal assortment.

Like the Payless stores in the U.S., the stores in the Middle East feature a wide assortment of shoes and accessories for the family including branded products for women, men and children covering a range of wearing occasions. Brands featured in the new stores include such well-recognized names as Airwalk®, American Eagle™, Smartfit®, and the Disney collection including shoes and accessories featuring Hannah Montana™, Dora the Explorer™, Spider-Man™ and Cars™. Also available at the Middle Eastern stores are Payless Designer Collections with hot-off-the-runway looks from New York fashion designers Lela Rose with Lela Rose for Payless, and Christian Siriano with Christian Siriano for Payless. The Payless Designer Collections are among the most widely distributed designer footwear labels in America today.

"We are very excited to introduce Payless to the Middle Eastern market, and we believe the Payless name and all it represents including great brands, a fun inspiring shopping experience, the latest affordable fashions and high quality will do well here -- just as it has in other regions of the world," said Mohammed Alshaya, Executive Chairman of M.H. Alshaya Co.

Payless and its more than 4,500-store chain has an expanding international presence today in countries and territories including the United States, Canada and in Central America, the Caribbean, and South America. Stores in Central America, South America, Trinidad and the Dominican Republic are operated through joint ventures. Stores in Canada, Puerto Rico, the U.S. Virgin Islands, Guam and Saipan, are operated through wholly-owned subsidiaries.

Payless believes that the franchise model will enable it to most effectively reach more international markets with its unique vision, and has plans to expand to other Middle Eastern countries, including Oman, Bahrain, Qatar, Egypt, Jordan and Lebanon. Under the multi-year franchise agreement, Payless and Alshaya said they believe the Middle East could, in the long term, support up to 200 stores.

This international expansion strategy is also a significant move in expanding Payless' diversified real estate strategy that includes a well-balanced mix of mall-based stores with free standing stores and those located in lifestyle and local shopping centers.

About Payless & Collective Brands, Inc.

Payless ShoeSource, Inc., a unit of Collective Brands, Inc., is the largest specialty family footwear retailer in the Western Hemisphere and is dedicated to democratizing fashion and design in footwear and accessories and inspiring fun, fashion possibilities for the family at a great value. As of the end of fourth quarter 2008, the company operated more than 4,500 stores. In addition, customers can buy shoes over the Internet through Payless.com® at www.payless.com.

Collective Brands, Inc. (NYSE: PSS) is a leader in bringing compelling lifestyle, fashion and performance brands for footwear and related accessories to consumers worldwide. The company operates three strategic units covering a powerful brand portfolio, as well as multiple price points and selling channels including retail, wholesale, ecommerce and licensing. Collective Brands, Inc. includes Payless ShoeSource, focused on democratizing fashion and design in footwear and accessories through its more than 4,500-store retail chain, with its brands American Eagle™, Airwalk®, Dexter®, Champion® and designer collections including Lela Rose for Payless and alice + olivia for Payless, among others; Stride Rite, focused on lifestyle and athletic branded footwear and high-quality children's footwear sold primarily through wholesaling, with its brands including Stride Rite®, Keds®, Sperry Top-Sider®, Robeez®, and Saucony®, among others; and Collective Licensing International, the brand development, management and global licensing unit, with such youth lifestyle brands as Airwalk®, Vision Street Wear®, Sims®, Lamar® and LTD®.

Information about, and links for shopping on, each of the Collective Brand's units can be found at www.collectivebrands.com.

About M.H. Alshaya Co.

M.H. Alshaya Co. is a leading international franchise operator for over 50 of the world's most recognized retail brands, including Payless ShoeSource, Starbucks™, H&M™, The Body Shop™, Foot Locker™, Mothercare™, Debenhams™, River Island™ and Boots™. The company operates over 1,700 stores across six divisions: Fashion & Footwear, Health & Beauty, Food, Casual Dining, Optics and Pharmaceuticals.

M.H. Alshaya Co. stores can currently be found in 15 markets across the Middle East and North Africa, Turkey, Cyprus, Russia and Poland. More recently, the company launched operations in Slovakia and Czech Republic. It employs more than 16,000 people from over 35 nationalities. The company has established itself as the industry leader across these territories through a combination of local market understanding and a comprehensive commitment to customer service. Growth in each of its operating divisions and brands is supported by continuous investment in talent and infrastructure. It applies best practices in retail operations, merchandising, marketing, information technology, logistics, real estate, human resources and financial controls.

M.H. Alshaya Co. is the retail business of the Alshaya Group, which was founded in Kuwait in 1890 and today represents one of the most dynamic companies in the Middle East. In addition to its retail operations, the Alshaya Group is active in a number of other sectors including real estate, automotive, hotels, trading and investments. Learn more about the company at www.alshaya.com.

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