Payless ShoeSource is to launch its brand in the Philippines. The move follows an an agreement with franchise partner Stores Specialists. The first stores are planned to open by mid-2010.

SSI is the leading fashion specialty retailer in the country, managing 72 brands and 340 retail stores.

Approximately five stores will open in the Philippines beginning mid next year, and more stores are scheduled to open in the coming years to ensure that the market is fully served, the companies said. This is a multi-year transaction; additional terms were not disclosed.

In the past year, Payless has announced similar franchise arrangements, including six new stores now in the Middle East and stores planned for Russia next year with M.H. Alshaya Company.

"The franchise model is proving to be the most efficient way to reach more international markets with the Payless brand and all it has to offer," said LuAnn Via, chief executive officer and president of Payless ShoeSource.

"Payless brings the know how in footwear specialty retailing, and our franchise partners like SSI bring its strong infrastructure and experience in the local region. Filipino people love to shop and have a strong appetite for American brands, fashion and footwear and accessories."

The companies said that through the franchise arrangement, Payless will provide SSI with seasonal product assortments, as well as expertise in retail operations, merchandising, marketing and brand strategy. SSI will provide retail location strategy, construction, logistics, and store training and staffing. SSI will use Payless' newest store format, the "Hot Zone" layout, and will purchase Payless product directly from Payless' seasonal assortment.