Collective Brands (NYSE: PSS), a footwear retailer that competes with companies such as Wal-Mart (NYSE: WMT) and Kohl's (NYSE: KSS), issued Q1 results on Wednesday after the bell. The business earned 59 cents per diluted share. That represented a decline over last year's results which, on an adjusted basis, calculated out to 66 cents per share.

That's not the only disappointing news. You also have a sales decline, impacted by currency effects (of course), as well as the expiration of a license related to the Tommy Hilfiger brand. Also, same-store sales dipped by 4.8% on a reported basis, and 3.2% after the exclusion of currency translation. As can be seen, you can look at same-store sales any way you'd like, but in the end, they went down, and that is never healthy for a retailer. A retailer always wants to see rising comps.

Collective Brands (NYSE: PSS) is the company that formed as a result of Payless Shoe Source's acquisition of Stride Rite. The boring, innocuous name aside, CEO Matt Rubel has pretty ambitious plans. According to the Associated Press, Collective aims to become a "a brand-building powerhouse, injecting a heavy dose of marketing savvy into a stubbornly fragmented and sleepy industry". More acquisitions are believed to be on the way.

Why is this interesting for investors? As I wrote in a recent piece, there are a a lot of very cheap-looking shoe stocks on the market right now. I have found several manufacturers and a few retailers trading at what appear to be very cheap valuations. Their cheapness combined with Collective's acquisitiveness could lead to more deals at nice premiums for investors.

While I'm not a fan of buying on essentially blind speculation of buyouts, these stocks look cheap on their own merits, and may well be good investments even without industry consolidation. But the rise of Collective Brands could make them more timely.

In what looks like an effort to diversify away from its low-price and low-quality (although that has been improving of late) flagship brand, Payless ShoeSource Inc. (NYSE: PPS) is acquiring Stride Rite Corp. (NYSE: SRR), the leading retailer of footwear for children. I have fond memories of going to Stride Rite with my parents when I was younger to pick out new shoes, and a lot of other people have similar memories. Payless will pay $800 million in cash for the company.

The company will change its name to Collective Branding after the deal is consummated because it was the most boring name it could think of that wasn't already taken.

Shares of Stride Rite are up more than 30%, while Payless shares soared more than 10%, making this one of those rare deals that looks good for the acquired company's shareholders and the owners of the acquiring company.

Payless has been a strong performer over the past few years, as CEO Matt Rubell has focused on upping the quality of the company's products. This acquisition seems like a great way to continue on that path, and the company's balance sheet looks strong enough to handle it.