Payless ShoeSource, Inc. has completed the acquisition of The Stride Rite Corporation and has officially changed its name to Collective Brands, Inc.

“Collective Brands is built on the solid foundation of each business unit's individual core competencies, expertise and heritage,” said Matthew E. Rubel, chief executive officer and president of Collective Brands, Inc. “The new company will reach an expanded customer base with iconic brands through its nearly 4,900-strong retail stores and vibrant wholesale, licensing, and e- commerce channels. It will benefit from new efficiencies and greater scale in all aspects of getting footwear and accessories to market.”

Collective Brands is a global footwear, accessory and lifestyle brand company with leading, well-recognized brands, superior quality and on-trend footwear, and accessory products offered through multiple channels. As one of the largest footwear companies in the western hemisphere, Collective Brands is organized with three highly complementary and separate business units with distinct missions in terms of their product offerings, distribution channels, brand portfolios, and target customer bases:

    -- Payless ShoeSource: democratizing fashion and design in footwear and
accessories through its nearly 4,600 retail store chain. Brands sold
at Payless include Airwalk®, American Eagle(TM), Champion®,
Dexter®, Tailwind® (through the Exeter Brands Group of Nike Inc.),
Disney®, Shaquille O'Neal-endorsed Dunkman(TM), ABT for Spotlights,
and designer collections: Abaete for Payless, Lela Rose for Payless and
alice + olivia for Payless.
-- Stride Rite: centering on premium lifestyle and athletic branded
footwear and high-quality children's footwear sold primarily through
wholesaling arrangements and more than 300 retail store locations.
Brands owned or licensed by Stride Rite include Stride Rite®,
Keds®, Sperry Top-Sider®, Tommy Hilfiger® footwear, Saucony®,
Hind®, and Robeez®, among others.
-- Collective Licensing International: specializing in brand management
and global licensing of its portfolio of youth, lifestyle and
high-quality fashion athletic brands. Brands for Collective Licensing
include: Airwalk®, Vision Street Wear®, Lamar®, Sims®, LTD®,
genetic(TM), Dukes®, Rage®, Ultra-Wheels®, and Skate Attack®.

While each unit will operate separately, the company will leverage core competencies across the organization in areas such as product design and development, global sourcing, distribution, inventory management, and various corporate functions.

    Collective Brands' competitive advantages include:
-- A diverse operating model with the ability to target specific customer
segments with branded products offered at a range of price points
through multiple channels.
-- The preeminent position in children's footwear both at the premium and
moderate level.
-- A stronger, more efficient organization with the scope and scale to
manage all aspects of getting to market -- from interpretations of
emerging trends, to design, development, sourcing, logistics and

The acquisition of Stride Rite was approved by its shareholders at a special meeting held on August 16, 2007, with 80.7% of its shareholders voting in favor of the transaction. The transaction, valued at approximately $900 million, consisted of an aggregate $800 million payment to Stride Rite shareholders, option holders and other equity holders, as well as the repayment of existing debt and other transaction costs. It was financed with approximately $175 million in cash-on-hand and a $725 million term loan B at a variable rate of currently 8.3% over 7 years.

David Chamberlain, chief executive officer for The Stride Rite Corporation, has retired from day-to-day operations of the company and will serve as an outside consultant to Matt Rubel. Richard Thornton will continue to serve as president and chief operating officer of the Stride Rite unit. Matt Rubel will continue to head the Payless ShoeSource unit, and Bruce Pettet will continue to lead the Collective Licensing unit.