Collective Brands Inc. announces the Middle East as newest international market for Payless ShoeSource retail chain

Company announced agreement with M.H. Alshaya Co., leading retail franchisee in region, marking the first time the retailer will franchise its stores

Dubai, September 03, 2008 - Collective Brands Inc. and its Payless ShoeSource unit announced today its plans for international expansion into the Middle East and that it has signed an agreement with M.H. Alshaya Co, the most influential retail franchisee in the region, as its franchisee for the new market expansion initiative. 

The specialty footwear retailer is on a mission to democratize fashion and design in footwear and accessories to the World.   The two companies said they expect to start opening new Payless stores in 2009 in the region including the Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar, Oman, Egypt, Jordan and Lebanon.   This is a multi-year transaction.  Additional terms were not disclosed.

"The people of the Middle East are young, vibrant and love to shop  frequenting malls and other shopping venues is a significant leisure activity, with customer visits as often as three times a week.  Consumers in the Middle East want the latest fashions and women, in particular, enjoy expressing themselves through shoes and accessories," said Matthew Rubel, chief executive officer and chairman of Collective Brands, Inc.  "We see a strong fit with the shoppers of this region and the Payless brand promise.  We are thrilled to have such a tremendous franchisee in Alshaya, with its significant retail expertise, infrastructure and deep knowledge of the region.  We look forward to bringing shoppers great style, quality and brand names - all at a great price."

Payless and Alshaya said they believe the Middle East could, in the long term, support more than 200 stores.

"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.  "People in the Middle East are going to be overwhelmed by Payless and what it has to offer."

This newest venture follows on the heels of Payless' successful launch into Colombia, South America, in early August, with four new stores open in Bogota and more than 35 additional stores yet to come in Colombia within the next 18 months.

The Middle East market initiative marks a first for the retailer in franchising its stores.   The company believes that the franchise model will enable it to most effectively reach more international markets with its unique vision.   As well, this strategic move is a significant step 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.

Payless and its more than 4,500-store chain has an expanding international presence today with more than 600 stores in 13 countries and territories including 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.

-Ends-

About Payless ShoeSource
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 first 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.

About Collective Brands, Inc.
Collective Brands, Inc. (NYSE: PSS), headquartered in Topeka, Kansas, U.S.A., 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, also headquartered in Topeka, 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 labels Abaeté for Payless™, Lela Rose for Payless™ and alice + olivia for Payless™, Patricia Field for Payless™, among others; Stride Rite, based in Lexington, Mass., 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, Englewood, Colo., the brand development, management and global licensing unit, with such youth lifestyle brands as Airwalk®, Vision Street Wear®, Lamar®, Sims®, LTD®, genetic®, Dukes™, Rage®, Ultra-Wheels®, and Skate Attack®. Information about, and links for shopping on, each of the Collective Brand's units can be found at http://www.collectivebrands.com.

About M.H. Alshaya Co.
M.H. Alshaya Co. is a leading international franchise operator for over 40 of the world's most recognized retail brands, including Starbucks, H&M, The Body Shop, Foot Locker, Mothercare, Debenhams, River Island and Boots. The company operates over 1,400 stores across six divisions: Fashion & Footwear, Health & Beauty, Food, Casual Dining, Optics and Pharmaceuticals. 

M.H. Alshaya Co. stores can currently be found in 16 markets across the Middle East, North Africa, Turkey, Cyprus, Russia, Poland and Egypt. More recently, the company launched operations in Slovakia, Czech Republic and Hungary. It employs more than 14,000 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.

Editorial contact:
Lisa George/Jonathan Tudor,
ASDA'A Public Relations,
Dubai.
Tel: 009714 3344550.
E-mail: l.george@asdaa.com/j.tudor@asdaa.com

© Press Release 2008