Payless Signs New Franchise Deals

Payless ShoeSource is extending its global reach.

The retailer will announce today it has signed two new franchise deals to bring the lower-priced footwear brand to South Korea, as well as to Thailand and Vietnam, and reach nearly 200 million new shoppers across the three countries.

The agreements were signed with Emart, a business unit of Seoul-based Shinsegae Group, for six stores in Korea; and with Central Marketing Group, a business unit of Bangkok-based Central Group, for five stores each in Thailand and Vietnam.

LuAnn Via, CEO and President of Payless ShoeSource, told FN that the franchise model is the best and most effective way to break into overseas markets.

“When we go into a market we’re not experts in, we leverage the skills and the knowledge of our partners because they really understand their customers. [Since] we understand the operational and merchandising perspectives [of this business,] we get the best of both worlds,” said Via. “The model also eliminates the need to build a global distribution structure.”

International expansion is also a good way to grow the overall Payless business as the domestic unit continues to struggle with its turnaround, the exec said.

“We’re really redirecting the domestic business and stabilizing it, and the store closures are going well [because] our objective is to close stores that are unprofitable and relocate stores that are,” she explained. “But we’re very well penetrated in US and Canada, so our real growth opportunity continues to be international.”

Emart is known for its perennially low prices, while Central Marketing Group has more than 50 years of experience in distributing and marketing international brands.

“Consumers in Thailand and Vietnam… love fashion, shoe shopping and to get the latest styles at a great price. Local shoppers will discover a great specialty shoe retailer in Payless,” said Vachiranunt Suphakarn, SVP of business development for Central Marketing Group.

Payless’ first franchised store bowed in Kuwait in 2009 and there are now more than 140 franchised doors in 17 countries. The chain aims for 700 by 2014.

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