Collective Brands and its Payless ShoeSource unit have announced plans for expansion into the Middle East region, signing an agreement with retail franchisee MH Alshaya.

The two companies expect to start opening new Payless stores in 2009, within the region including the United Arab Emirates, Saudi Arabia, Kuwait, Oman, Bahrain, Qatar, Egypt, Jordan and Lebanon. It is a multi-year transaction but additional terms were not disclosed.

"The people of the Middle East are young, vibrant and love to shop - frequenting malls and other shopping venues is a significant leisure activity, with customer visits as often as three times a week.

"Consumers in the Middle East want the latest fashions and women, in particular, enjoy expressing themselves through shoes and accessories," said Matthew Rubel, chief executive officer and chairman of Collective Brands.

Payless and Alshaya said they believe the Middle East could, in the long term, support more than 200 of its stores.

"We are very excited to introduce Payless to the Middle Eastern market, and we believe the Payless name and all it represents including great brands, a fun inspiring shopping experience, the latest affordable fashions and high quality will do well here - just as it has in other regions of the world," said Mohammed Alshaya, executive chairman of MH Alshaya Company.

This venture follows Payless' successful launch into Colombia, South America, in early August, with four new stores open in Bogota and more than 35 additional stores still due in Colombia within the next 18 months.

Payless has more than 600 stores in 13 countries and territories including Canada and in Central America, the Caribbean, and South America. Stores in Central America, South America, Trinidad and the Dominican Republic are operated through joint ventures. Stores in Canada, Puerto Rico, the US Virgin Islands, Guam and Saipan, are operated through wholly owned subsidiaries.

However, the Middle East market initiative marks a first for the retailer in franchising its stores.

A statement added: "The company believes that the franchise model will enable it to most effectively reach more international markets with its unique vision.

"As well, this strategic move is a significant step in expanding Payless' diversified real estate strategy that includes a well-balanced mix of mall-based stores with free standing stores and those located in lifestyle and local shopping centers."