Michael Massey, CEO, Collective Brands

Michael Massey, CEO, Collective Brands

Footwear retailer Collective Brands is in a state of flux, on the one hand announcing plans to shutter almost 500 stores in the US, but on the other inking deals to expand its distribution in a number of emerging markets. Here CEO Michael Massey speaks to just-style's Petah Marian about how the company is developing its presence overseas and online.

Massey has become CEO of Collective Brands at a turbulent juncture in the company's history. Since he assumed the role in mid-June this year, the retailer has announced plans to close some 476 Payless and Stride Rite stores in the US, as well as signing deals to expand distribution of its Sperry Top-Sider, Keds and Saucony brands in a number of Asian markets.

While quietly-spoken and measured in his speech, Massey becomes ebullient when talking about the company's emerging markets operations. "Emerging markets are going to be the growth markets if you have the right concepts and can reach the customer," he says.

"We've invested in them for many years, and we've found those customers to be great customers, they're relatively easy to reach, so that's our future."

The company currently operates more than 4,844 stores selling lifestyle, fashion and performance footwear and accessories brands. The group includes the Payless ShoeSource chain; wholesale brands including Stride Rite, Keds, Sperry Top-Sider, Robeez, and Saucony; and a licensing unit for brands like Airwalk and Above The Rim.

And earlier this year revealed plans, through its various divisions, to enter Australia, China, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore and Thailand.

While affirming that developed markets will play a role in its future, with "great markets in the United States," and "great developed markets in Canada", the company remains focused on developing markets.

"From a growth standpoint we'll be very focused on the emerging markets. And that goes well beyond the BRIC countries. In fact, I think they'll be far more difficult than the other emerging markets," says Massey.

He believes that the relative barriers to entry are more significant in the BRIC (Brazil, Russia, India, China) countries, and it requires "a lot more preparation" to establish a presence here than in other emerging markets like Indonesia, Latin America and South East Asia.

But while he sees great opportunities in these developing markets, he doesn't expect retailers to have an easy ride. In fact, he expects to see "increased competition" as they open up to global retailers. "The relative sophistication in these markets is going to develop very, very quickly".

Online opportunities
Online is set to play a major role in the company's development in both emerging and developed markets.

"The key way to reach the customer is online. That can be in combination with bricks-and-mortar, but it's not just a developed market thing. The need to reach your customer in as many ways as possible is essential in emerging markets, developed markets, it doesn't matter which," emphasises Massey.

A focus on localisation is something that Massey also believes is key to success across the company's entire footprint.

"All retailers, regardless of geography, are going to be pressed to localise. Localisation and individualisation, whether it's communication or product assortments, are going to be key drivers in winning with consumers," says the Collective Brands CEO.

"It goes back to a few fundamentals of retail. Know your customer, serve your customers...how can you better do that. And that is true regardless of where the customer is. People forget that sometimes. It's not rocket science."

Product costs
Massey agrees that input costs are rising, but doesn't limit the issue to China, where the retailer does the lion's share of its product sourcing.

"I think the world is becoming more expensive, I wouldn't limit it just to China. I think China is a great place to source product, I think there are other parts of the world that are wonderful as well."

While China does get the majority of Collective Brands' sourcing budget, it also does a "significant portion" of sourcing in Vietnam" as well elsewhere in Asia, and is starting to source in Latin America.

However, the company is looking to diversify its sourcing base. "As we grow, getting closer to the market, I believe we will diversify more to shorten lead times, and become more efficient in our costs."