Collective Brands is banking on its collective efforts in shoe making and retailing. The holding company boasts a portfolio of premium and moderate footwear and accessories through its Performance + Lifestyle Group (PLG), a wide reach of some 4,455 Payless ShoeSource outlets in about 25 countries, and an established licensing and brand management unit in Collective Licensing. Collective Brands was formed in 2007, when powerhouse Payless ShoeSource acquired Stride Rite, which is primarily a wholesaler to department stores and operates leased departments at Macy's stores. With brands such as Keds and Saucony, the company operates in the US, Canada, the Caribbean, Central and South America, and Puerto Rico.

Amid falling sales, hundreds of store closings and executive departures, Collective Brands is being taken private by rival Wolverine World Wide, and a pair of private equity firms, Blum Capital and Golden Gate Capital, in a deal valued at about $2 billion. Post sale, Wolverine will acquire the Performance + Lifestyle Group (PLG), which includes the wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite, and Keds brands. The private equity buyers will jointly acquire the operations of Payless and Collective Licensing, which together will operate as a standalone entity. (In August 2011 Collective Brands announced it would close 475 nonstrategic stores over the next three years and explore strategic alternatives to enhance shareholder value.)

Since its formation five years ago, Collective Brands has seen declines in same-store sales at its shoe stores, average selling prices, and shoes sold per store. Weak foot traffic and falling sales at Payless stores in the US led to the abrupt departure of the company's CEO in mid-2011, followed by the announcement that it plans to shut hundreds more Payless stores and explore strategic alternatives for the company. At the helm since 2005 and through a period of noteworthy transition for the company, Matt Rubel in June abruptly left vacant the positions of chairman, president, and CEO. Rubel had been leading the Payless ShoeSource organization prior to the formation of Collective Brands. (Before joining the footwear firm, Rubel headed up high-end shoemaker Cole Haan as its chairman and CEO and was a top executive at J. Crew Group.) Collective Brands replaced Rubel with Michael Massey as interim CEO and Scott Olivet as non-executive chairman as the company searches for a permanent replacement. Massey came to Payless ShoeSource -- and subsequently Collective Brands -- by way of The May Department Stores, which had spun off Payless. While Massey's expertise lies in his role as general counsel, he brings to the table 15 years of experience at Collective Brands in the areas of international expansion and operations. As chairman, Olivet will leverage his career as a veteran in the apparel, sports, and retailing industry at OakleyNIKE, and The Gap

Rubel's abrupt departure followed a tepid fiscal 2011 in which the total sales at the company grew by just 2%. (The profit picture was brighter with net income up about 36%.) The company's core retail business in the US declined by about 4% vs. the prior year, while the international, wholesale, Stride Rite businesses all saw sales increase. Same-store sales at the company's retail stores were negative for the third consecutive year.

Currently, Payless's 3,795 US stores account for about 60% of Collective Brands' sales. To boost its international efforts, the company has expand in Russia through a franchising agreement with M.H. Alshaya. The first Payless stores in Russia and the Philippines debuted in 2010. Alshaya is also Payless's franchise partner in the Middle East, where the shoe seller already operates stores in the UAE, Saudi Arabia, and Kuwait. Other countries in the region, including Bahrain, Egypt, and Lebanon, are on the list for expansion.

The company -- as it is today -- took shape years ago. The deal to pair Payless ShoeSource with Stride Rite in Collective Brands' closet was valued at $800 million plus an estimated $100 million in debt. A joined Payless ShoeSource, Stride Rite (now under the PLG umbrella), and Collective Licensing provides numerous competitive advantages for Collective Brands. These include the ability to target a variety of customers at a broader price-point range through multiple channels, such as wholesale, retail, licensing, and e-commerce. Not only did the deal make Collective Brands a top shoe seller worldwide, but it also gave the firm a foothold at the premium and moderate levels of children's shoes. In late 2009 Collective Brands announced that going forward its Stride Rite unit -- which operated about 360 shoe stores at the time -- would do business under the name Collective Brands Performance + Lifestyle Group. The name change is designed to reflect the broad range of the company's brands, which include Sperry Top-Sider, Saucony, Keds, and the Stride Rite Children's Group.

Denver-based Collective Licensing International (CLI), acquired in 2007 for about $91 million, is a youth-oriented brand development, management, and licensing lifestyle business. CLI expanded in 2010 through its purchase of the Above The Rim (ATR) brand from Reebok International. The move allowed CLI to extend its reach in youth lifestyle and athletic brands.

The investment management firm PRIMECAP Management Company owns about 10% of Collective Brands' shares.

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