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, Lucaslms Star
Wars, and Jessica Simpson
, Saucony
, Stride Rite
, and Keds
. CLI is
a brand development and licensing company that specializes in building, launching, licensing and growing
brands focused on the youth lifestyle market, including Above the Rim
, Airwalk
, Spot-Bilt
, Clinch Gear
,
Lamar
, Sims
, Strikeforce
, American Eagle
, Champion
, Christian Siriano
for Payless
, Dexter
. Generally, North
American stores are company-owned; stores in the Central and South American regions (as defined in the
Stores section below) operate as joint-ventures; and stores in Europe, Asia, and the Middle East are franchised.
Stores operate in a variety of real estate formats. Approximately a quarter of the company-owned stores are mall-
based while the rest are located in strip centers, central business districts, and other real estate formats. We also
operate payless.com
where customers buy our products online and store associates order products for customers
that are not sold in all of our stores or are out of stock. Payless stores possess an average of approximately
$60,000 worth of inventory at cost depending upon the time of year (see Seasonality section). We focus our
marketing efforts in a variety of traditional and electronic channels primarily on female, budget-conscious
consumers who appreciate trend-right product. Our core customer is a female head-of-household about 35-54
years old with children. Her average annual household income is about $65,000 and she is more likely to be
African-American or Hispanic as compared to overall women self-purchasers of footwear in the U.S. Paylesss
most addressable consumer segment tends to be households with annual income of less than $75,000 in the
market for non-athletic footwear below $30 per pair.
1
PLG is a leading provider of iconic performance and lifestyle brands, each with unique personalities and
strong marketplace positions focused on distinct and targeted consumer segments. PLG is predominantly a
wholesaler of footwear, selling its products mostly in North America in a wide variety of retail formats including
premier department stores, specialty stores, and athletic and sporting good stores. PLG markets products in
countries outside North America through owned operations, independent distributors, and licensees. PLG designs
and markets categories of footwear and related accessories under various brands and trademarks, including:
Brand and/or trademark Product categories
Sperry Top-Sider
and Sperry
, Pro-Keds
, and Grasshoppers
, Robeez
, and other trademarks Childrens dress, athletic, and casual footwear, boots and
sandals
PLG also markets its products directly to consumers through a variety of owned formats: Stride Rite
childrens stores, outlet stores, Stride Rite store-in-stores, Sperry Top-Sider stores, and e-commerce sites. At the
end of 2011, there were 356 PLG stores, owned or franchised, in 10 countries.
History
Payless was founded in Topeka, Kansas in 1956 with a strategy of selling low-cost, high-quality family
footwear on a self-service basis. In 1962, Payless became a public company. In 1979, it was acquired by The
May Department Stores Company (May Company). On May 4, 1996, Payless became an independent public
company again as a result of a spin-off from May Company. In 1998, we reorganized forming a new Delaware
corporation, Payless ShoeSource Inc., which changed its name to Collective Brands, Inc. in August 2007. In
March 2007, we acquired Collective Licensing, a Denver-based brand development, management and licensing
company. In August 2007, we completed our acquisition of The Stride Rite Corporation.
The Stride Rite Corporation was founded in Boston, Massachusetts in 1919, as the Green Shoe
Manufacturing Company (Green Shoe). Green Shoe became a public company in 1960 and was listed on the
New York Stock Exchange. It adopted The Stride Rite Corporation name in 1966 in recognition of its well-
respected brand name. The first Stride Rite childrens store was opened in 1972. The Sperry Top-Sider and Keds
brand names were acquired from Uniroyal in 1979. During 2005, The Stride Rite Corporation completed its
acquisition of Saucony and in 2006 it purchased Robeez. In the third quarter of 2009, Collective Brands, Inc.
announced that The Stride Rite Corporation will do business as Collective Brands Performance + Lifestyle
Group.
Our principal executive offices are located at 3231 Southeast Sixth Avenue, Topeka, Kansas 66607-2207,
and our telephone number is (785) 233-5171. Our common stock is listed for trading on the New York Stock
Exchange under the symbol PSS.
Segments and Geographic Areas
We operate our business in four reporting segments: Payless Domestic, Payless International, PLG
Wholesale and PLG Retail. See Note 16 in the Notes to the Consolidated Financial Statements for a discussion
on financial results by segment.
(i) The Payless Domestic reporting segment is comprised primarily of domestic retail stores under the
Payless ShoeSource name, the Companys sourcing unit and Collective Licensing.
2
(ii) The Payless International reporting segment is comprised of international retail stores under the
Payless ShoeSource name in Canada, the South American Region, the Central American Region,
Puerto Rico, and the U.S. Virgin Islands, as well as franchising arrangements under the Payless
ShoeSource name.
(iii) The PLG Wholesale reporting segment consists of PLGs global wholesale operations.
(iv) The PLG Retail reporting segment consists of PLGs owned Stride Rite childrens stores, PLGs outlet
stores, store-in-stores at select Macys Department Stores and Sperry Top-Sider retail stores.
Stores
At the end of 2011, we operated a total of 4,496 wholly-owned or joint-ventured retail stores. This was
comprised of 3,499 in the Payless Domestic segment, 661 stores in the Payless International segment, and 336
stores in the PLG Retail segment. In addition, we franchised 163 stores.
Payless Domestic
The average size of a store in the Payless Domestic segment is approximately 3,200 square feet. Depending
upon the season and the sales volume of the store, stores employ a varying number of associates, including a
store manager or shared store manager. Stores use a combination of full-time and part-time associates. By
including materially remodeled stores in our calculation as new stores, Payless Domestic stores were 12 years old
on average at the end of 2011. Payless stores operate in a variety of real estate formats such as shopping malls,
central business districts, free-standing buildings, strip centers, and leased departments in ShopKo
stores. As of
year-end, there were 144 ShopKo
, Payless ShoeSource
, and
various logos used on our Payless ShoeSource store signs and in advertising, including our traditional yellow and
orange signage and our orange and blue circle P logos. The domain names include Payless.com
, as well as
derivatives of Payless ShoeSource. We also own and use the following trademarks and brands in Payless stores:
Airwalk
, and Spot-Bilt
.
Currently, we have agreements in place regarding the following brands:
Trademark Licensor Expires
Blues Clues, SpongeBob SquarePants,
and Pro-Slime
MTV Networks, a division of
Viacom International, Inc.
December 31, 2012
The Last Airbender
properties
Lucasfilm Ltd. December 31, 2012
American Ballet Theatre
, Airwalk
,
Clinch Gear
, Dukes
, genetic
, Hind
, Lamar
, LTD
, Rage
, Skate Attack
, Ultra-Wheels
, and Vision
Street Wear
,
Keds
, Robeez
, Saucony
, Sperry Top-Sider
characters and
properties
Disney Consumer Products, Inc. December 31, 2013
Superball
, Sperry Top-Sider
, Stride Rite
and Keds