Collective Brands Inc yesterday (28 September) told analysts and investors at a meeting in New York that its Stride Rite children's footwear unit is unlikely to add to earnings in 2008 due to the impact of purchase accounting.

Outlining its strategies for the first time since it was formed in August, following the US$800m acquisition of The Stride Rite Corporation by Payless ShoeSource, the holding company said it expects the acquisition to result in cost efficiencies of $45-50m from 2008-2010.

Specifically, efficiencies will be about $5m in 2008, $12-15m in 2009 and $25-30m in 2010

"Collective Brands will be more than simply the sum strength of our business units' individual core competencies, expertise and heritage; we intend to leverage this exceptional foundation to become the pre-eminent, consumer-centric, global footwear, accessories and lifestyle brand company," said Matthew E. Rubel, chief executive officer and president.

Annual growth in operating profit is forecast to be in the low-teens between 2006 and 2009.

Through its Stride Rite and Payless units, Collective Brands has a portfolio of labels including Stride Rite, Keds, Sperry Top-Sider, Tommy Hilfiger and Saucony and operates nearly 5,000 stores

The company says its hybrid retail/wholesale/licensing business model will drive improvements in gross margin by leveraging significant sourcing and manufacturing benefits, as well as improve its international growth opportunities.