Collective Brands' Payless ShoeSource unit signed two new franchise agreements with partners Emart, a business unit of Shinsegae Group, Seoul, for stores in Korea, and Central Marketing Group, a business unit of Central Group, Bangkok, for stores in Thailand and Vietnam, bringing the total countries which will have franchised Payless stores to 20 countries.
Payless and its partners said that in 2012 they expect six store openings in Korea, as well as five stores each to open in Thailand and Vietnam.
“The franchise model has proven to be a profitable and effective way to quickly reach more international markets with the Payless brand and all it has to offer — great fashion, well-recognized brands, product quality and leading customer service all at a great price,” said LuAnn Via, Chief Executive Officer and President of Payless ShoeSource. “Payless brings the know-how in footwear specialty retailing, a sophisticated sourcing and supply chain system and powerful seasonal product collections. Our franchise partners like Emart and Central Marketing Group bring their strong infrastructure and experience within the local market. Together with these new franchise partners we are truly excited to bring the Payless brand to these three countries and their nearly 200 million consumers.”
Emart is well aligned with Payless' value price offering. Since its founding, the firm has reinforced a fundamental retail discounting principle called Every Day Low Price (EDLP) across its markets, and in 2010 declared a new price policy in which the company continuously provides products at low prices throughout the year, rather than short-period discounting such as on a weekly basis.
Central Marketing Group has more than 50 years of experience in distributing and marketing international brands in Thailand and Vietnam. It manages more than 120 brands in six different product categories including fashion and sports apparel, cosmetics, branded watches, electronics and home appliances, IT and stationery and traveling goods.
“We see strong alignment with our retail principles and Payless' model and are thrilled to partner with Payless to bring its store chain to shoppers in Korea,” said Joo Hyung Park, Executive Vice President, Corporate Strategy and Operation of Emart. “Payless is known across the globe as an American brand that delivers great shoes and accessories for the entire family at a great price. We see strong synergy with Payless' products when aligned with Emart's number one competitiveness in the Korea retail market.”
“We are excited to partner with Payless to bring its store chain to consumers in Thailand and Vietnam. They love fashion, shoe shopping and to get the latest styles at a great price. We know our local shoppers will discover a great specialty shoe retailer in Payless and will be thrilled by what they find in the stores,” said Vachiranunt Suphakarn, Senior Vice President, Business Development for Central Marketing Group.
Through the franchise arrangements, Payless will provide both franchise partners with seasonal product assortments, as well as expertise in retail operations, merchandising, marketing and brand strategy. Both Emart and Central will provide retail location strategy, construction, logistics, store training and staffing and local marketing execution.
Payless' knowledge in large-scale supply chain management and expertise in managing the complexities of footwear allow for rapid growth in new geographies. As well, the retailer's sophisticated sourcing and supply chain setup allows it to serve the tastes of consumers of various cultures and climates around the world.
Both firms will utilize Payless' newest store format and will purchase Payless product directly from Payless' seasonal assortment with slight adjustments per the localized footwear needs of the market. Like the Payless stores in the U.S., the international franchise stores are expected to feature a wide assortment of shoes and accessories for the family including products for women, men and children covering a range of wearing occasions.
