Collective Brands to Open Stride Rite Stores in China

Collective Brands Inc. is planning to take its Stride Rite children s shoe brand to the world s most populous market, opening stores in mainland China next year, its chief executive officer said.

The company, based in Topeka, Kansas, is teaming up with Li & Fung Retailing and will also open stores in Hong Kong, Malaysia and Singapore starting in December, Matthew Rubel said yesterday in a telephone interview. Li & Fung will develop stores, e-commerce and wholesale business for Collective in Asia. Closely held Li & Fung Retailing isn t related to the publicly traded company of similar name.

Collective, which operates the Payless ShoeSource chain, is pegging growth on international expansion, opening stores in Russia and the Philippines this year and expanding in the Middle East. The retailer is entering China with a prestige brand to meet demand from a growing middle class and because lower- priced goods are made and widely available there, Rubel said.

They have the one-child policy, he said. Think about how many adults there are to spend on that one child.

Rubel declined to say how many stores are planned. Li & Fung Retailing, which will run them, will be aggressive about identifying potential sites, he said.

International sales accounted for 13 percent of Collective s revenue last year, according to data compiled by Bloomberg. The company expects that to grow to more than 20 percent by 2013, a spokeswoman said.

Collective began international franchising of Payless stores about 18 months ago and predicts that it will have about 700 locations within five years, including at least 300 in Indonesia, where it announced an agreement with a unit of publicly held retailer PT Mitra Adiperkasa last month.

Collective Brands rose 23 cents, or 1.5 percent, to $15.76 at 4:03 p.m. in New York Stock Exchange composite trading. Its brands include Saucony and Keds.