Collective Touts Cost Savings

LOS ANGELES — Cost reductions associated with Collective Brands Inc.’s acquisition of Stride Rite — from logistics, raw material, administrative and factory expenses — are expected to amount to $6 million in 2008 and, in total, save the company $25 million by 2010, according to information released by Collective late Tuesday.

The company issued a number of financial targets as part of its annual investor conference, held this week in Kansas City, Mo.

Despite the cost synergies and savings achieved through the acquisition, however, the company said the savings wouldn’t show up in earnings per share in 2008, due to the impact of purchase accounting from the Stride Rite deal.

The company also said it would employ strict inventory and expense controls in an attempt to mitigate the impact of a difficult retail climate, though same-store sales would likely miss the company’s low-single-digit target in the near-term.

For his part, President and CEO Matt Rubel applauded Collective’s success at integrating the two companies and executing its new business model. “In only one year’s time — a span that has encompassed one of the most difficult markets in recent memory — the strategic rationale for creating Collective Brands and its new business model has been validated,” he said in a press release. “By reaching customers through multiple price points and through a variety of retail, wholesale, licensing and e-commerce selling channels, we have been able to both maintain a steady state today, while continuing to leverage this exceptional foundation to drive growth and build value for the future.”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s