Following shareholders’ approval of the deal, Payless ShoeSource has completed its acquisition of The Stride Rite Corp. for about $800 million. As a result the company resulting from the merger has taken the name of Collective Brands, comprising Payless’ network of 4,600 stores and the brands owned or licensed by Stride Rite and by Collective Licensing International, a company previously bought by Payless. The group’s portfolio of shoe brands includes Airwalk, Keds, Sperry Top-Sider and Saucony.
Collective Brands has reported a drop in net income of 23 percent to $24.9 million for the 2nd quarter ended Aug. 4 on an overall 1 percent decline in revenues to $699.3 million, largely due to the softness of the U.S. economy and some external factors. Retail sales were down by 1.4 percent on a comparable basis and the outlook for the balance of this year is cautious.
In reporting the results, the management outlined several initiatives to grow its newly acquired brands. The Stride Rite Children’s group plans to expand the age range up to 10 years and will introduce a limited edition collection of Airwalk branded footwear for kids. An aggressive expansion into the women’s market is meant to make Sperry Top-Sider’s women’s business larger than the men’s business in the long term, significantly reversing a 3:1 male/female ratio. At Keds, the target age range will be expanded to 18-40 years and the product line will be broadened beyond canvas and vulcanized shoes. Saucony will try to build its apparel business. The Hind brand of clothing will be licensed out.
Meanwhile Collective Brands has appointed Douglas Treff as executive vice president and chief administrative officer of the group. He had most recently the same title at Sears Canada. Treff will be mainly in charge of finance, store development and information technology for the Payless retail chain.