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Payless ShoeSource Selects i2 SCM and CRM Solutions

i2 Technologies Inc, a leading provider of dynamic value chain management solutions, announced that Payless ShoeSource Inc has extended its relationship with i2 by selecting i2 Supply Chain Management (SCM) and Customer Relationship Management (CRM) solutions.

These solutions were chosen by Payless to optimize markdowns of seasonal merchandise in its nearly 5,000 stores. Payless maintains an average of 800 different footwear styles and colors. Because most of its footwear is seasonal, the company needs a solution designed to quickly plan for and react to changing demand, allowing Payless to maximize revenue and achieve margin and clearance objectives. To meet this need, Payless purchased i2 Demand Planner from the company's SCM suite, and i2 Markdown Optimizer from i2 CRM solutions.

i2 Demand Planner is designed to allow Payless to predict, manage and optimize future demand. This solution creates forecasts based on rate of sale and on-hand inventory. The information is then integrated into i2 Markdown Optimizer, which has been developed to examine product sales and inventory positions and determine the optimal markdown schedules for maximizing revenues and minimizing inventory write-offs. i2 Markdown Optimizer incorporates price elasticity of demand into the optimization and supports what-if analysis to evaluate alternative markdown strategies.

"The growing need for us to manage our seasonal inventory led us to evaluate solutions from a cross section of vendors. We chose i2 because of its long-term retail strategy and its commitment to our industry," said Darrel Pavelka, senior vice president, Merchandise Planning and Distribution, Payless ShoeSource. "Our current i2 solution, Merchandise Planning, is a critical part of our overall strategy for improving assortments in our stores. We anticipate that by expanding to Demand Planner and Markdown Optimizer, we will be able to derive significant value from the integration of i2's merchandising optimization tools." Payless believes that with these solutions in place, the company can impact margins and better meet customer demand for its products.

Payless anticipates that the global implementation will be completed in the second quarter of 2002. "Payless is a savvy retailer that understands how technology can assist in the deployment of strategic retailing capabilities and assist in reaching its financial and customer service goals. We are pleased to partner with them as their value chain needs grow," said Bernard Goor, i2 vice president, Product Marketing. "We are committed to helping deliver value to Payless through its use of i2 solutions and will work closely with them as they work toward achieving their strategic business objectives."

About i2

For more than a decade, i2 has been a leader in supply chain management. i2 has extended its technology and expertise to Dynamic Value Chain Management -- solutions to help companies collaborate on decision-making processes not only across functions within a single company, but across multiple companies. i2 solutions span the value chain interactions, including customer relationship management, supply chain management and supplier relationship management. Established in 1988, i2 is the only software solutions provider that measures, audits, and reports total value provided to its customers, with a mission to deliver $75 billion in value by 2005. Learn more at www.i2.com.

About Payless ShoeSource

Payless ShoeSource Inc is North America's largest family footwear retailer. The company operates a total of 4,974 stores offering quality footwear and accessories at affordable prices. In addition, customers can buy shoes over the Internet through Payless.com at www.payless.com.

Contact i2 Technologies Inc, Beth Elkin, 469-357-4225, beth_elkin@i2.com.