The founder of the eponymous US footwear brand has had a colourful past. But with plans to conquer the UK market in full swing, the future looks even brighter.
Pacing around his huge stand at Las Vegas footwear fair WSA wearing a casual shirt, snakeskin boots and a baseball cap, Steve Madden is a self-confessed business bulldog and the founder of a US$500 million (£248m) footwear giant.
In 1990, with just US$1,100 (£545) in his bank account, Madden started his own footwear business. Two decades later he is responsible for shodding the feet of millions of style-hungry US women.
The Steve Madden company is a sprawling empire with six footwear brands under the Steve Madden umbrella, including the core Steve Madden collection, the Madden Girl line for teens and younger women, and Steve Madden Fix, a sports fashion range now in its second season. But now Steve Madden is about to go international. Last year Madden finalised a long-awaited distri-bution deal to bring his footwear empire to the UK and Northern Europe via footwear supply company OPS.
Madden is one of the footwear industry’s biggest “celebrities” and he is revered by US retailers. Customers on the Steve Madden stand at WSA all vie for his attention season after season. His manner is steely and he has an extremely short attention span, yet it is his quirky offbeat personality that seems to fuel people’s interest in him.
“Do you think I should open a shop in Covent Garden?” Madden asks Drapers apropos of nothing. He is interested in the Shellys unit on Neal Street in the centre of London’s Covent Garden as a base from which to kick-start the Steve Madden brand in the UK.
US footwear market tough
Before waiting for a response, his mind darts to something else. “What do you think of this shoe?” he asks, holding up a fashion-able patent penny loafer.
“I dig it, but maybe in this colour?” he continues, pointing to a similar style but in turquoise, before exclaiming: “This joint is fresh, baby!”
Following on from the OPS deal, Madden is furiously chasing further international expansion as he grows his empire. “Last year we were on a mission to the UK every week,” he says, explaining how he brokered the deal. “How is business in London?” he asks.
After hearing that trade in much of the UK footwear retail sector is tough, Madden laments the current state of the US footwear industry, admitting that business is also turbulent Stateside. “The market is a storm. I’m happy with where we are, even though it is bad out there,” he says.
There is a US recession pending or in full swing, depending on who you talk to, and Steve Madden, which is listed on the NASDAQ stock market, suffered from a lack of strong fashion trends and soft consumer spending in the US economy, which hit fourth-quarter earnings.
Net sales for the period dropped to US$102.7m (£50.8m), against US$114.1m (£56.5m) the year before. Net income fell by 53.2% to US$4.7m (£2.3m), down from US$10m (£5m) against the same period in 2006.
However, Madden is optimistic about the future of the US economy. “ The US market is suffering, but it’s not dead,” he explains. “I hope it’s cyclical, because that implies that the situation is temporary. You just have to keep going.”
Alongside a shaky consumer economy, the US footwear market continues to grow and there is plenty of competition for Madden to contend with in the domestic market. The launch of US singer Jessica Simpson’s footwear range, orchestrated by footwear behemoth Vince Camuto Group, has had an impact on sales. “The Jessica Simpson brand is formidable competition. It really came up the back straight at me in [department store chain] Nordstrom,” Madden says in his typical no nonsense style.
Talks with Amy Winehouse
Footwear suppliers have been clamouring to win the UK licence for Steve Madden for years, but the disappointing performance of the US economy may have contributed to Madden’s decision to finally sign a deal to cross the pond. The brand may not be quite on the level of Abercrombie & Fitch in terms of UK recognition, but its vast store network in the US means it is well recognised by UK shoppers who have travelled to the States.
Some of the Steve Madden shoe styles are quite American in styling, but OPS has selected a narrower range suited to Europe for the UK market, which it showed at London trade show Pure and Italian footwear fair Micam in Milan this season. Styles for autumn 08 include soft leather ankle boots, and towering platforms in candy colours with silk printed fabric detailing.
Madden says: “We do make shoes that are right for the UK. The UK woman is totally our customer, although the London woman may be slightly faster [in trend pick up],” he admits.
Aside from the UK and northern Europe, the brand itself has a series of international distribution agreements in territories including Turkey, Venezuela and Australia, but Madden says the UK market is an important target for the brand.
Last year, Madden had brief talks with singer and tabloid fodder Amy Winehouse about the possibility of being the face of the brand, but discussions have not progressed further. A marketing deal of that stature would certainly have put Madden on the UK map in an instant.
Madden adds that he would love to eventually have standalone stores in the UK alongside a wholesale customer base. “We could have 40 stores and good wholesale accounts,” he says.
Steve Madden has already secured 25 UK wholesale accounts, including etail giant Asos, which has recorded about an 83% sell-through rate on its first spring drop of footwear. West London-based mini chain American Pie is also on board for autumn 08.
Growing the brand
OPS director Tim Cooper says building up the Steve Madden wholesale business is a priority if the brand is to ensure its longevity in the UK market. “We are focused on the wholesale business for the short- to medium-term,” he explains. “It’s exciting because the product has unique positioning.”
In addition to looking overseas for growth, Madden has also become increasingly territorial around the domestic US footwear market. The debut of Sir Philip Green’s Topshop store in New York this summer prompts some combative talk.
“I wish we could work with the Topshop people [in the UK],” he says. “It’s a great location he has [in New York], but he can’t beat me on New York shoes. I’ll whup his ass.” But he adds that he admires the business and says of Green: “He’ll do great here. The more the merrier.”
As Madden sits down on his stand to take a (very short) breather, a business associate interjects to say goodbye. As the woman leaves, she tells Madden she’ll drop him an email to arrange a lunch meeting. “I don’t have email, baby – gangsters don’t email!” he replies, in his confusing live-wire style. Glancing at her shoes, which are by Tory Burch, a rival US designer, he quips: “By the way, Tory Burch is not allowed on this booth, honey!” It’s clear that not a lot passes Madden by.
Jailed in Florida
He always seems to have a wry half smile on his face, perhaps because he knows what it is like to be truly up against it. Business-led setbacks prompted by an unstable market or slow trends must seem relatively minor compared with the 41-month prison sentence (he served three years) he received in 2002, on charges of violating securities laws.
Madden served his time in a Florida correctional facility and, as a result of the charges, was banned from becoming an officer or director of his own company until June 2008. No decision has been made on whether he intends to return as chief executive.
However, a little thing like a prison term did not get in the way of this man’s drive and passion for his business. During his time behind bars, he set himself up as a creative consultant to the Steve Madden business, which enabled him to have an impact on product and branding at the company during his incarceration.
While in jail Madden found love with long-time employee and frequent visitor Wendy Ballew, who is now his wife, and he recently became the father of twins. He seems more relaxed than three seasons ago when Drapers caught up with him at the same WSA trade fair.
“Emotionally I’m satisfied. Philosophically, I am still trying,” he says. “Business-wise it’s good. I feel more excited than I have done in a long time.”
Alongside his core footwear business, Madden has also made a push into access-ories. Through Steven Madden Ltd’s wholly owned subsidiary, Daniel M Friedman & Associates, Steve Madden is the licensee for Betsey Johnson and Tracy Reese handbags and belts.
A new hosiery distribution deal with Gina Group has also just been signed and next on the list is a clothing deal.
A clothing launch would take Steve Madden closer to becoming a fully-fledged lifestyle brand. Clothing licence discussions are under way for a spring 09 launch and Madden says: “We now think of ourselves as a global lifestyle brand. We want to dress our customers from head to toe, accessorise them, and make things that they can use in the home.”
With its huge brand equity the business has attracted interest beyond international distributors and licensing firms. The company issued a statement in October last year saying it had received several approaches from potential purchasers. However, it decided that a sale was not in the best interest of shareholders or the business, which appears to operate like a tight-knit family.
There is always a great atmosphere at Steve Madden’s WSA stand, with the same faces on the booth every season. Various team members – including brand director Rob Schmertz – crowd around Madden, showing off new product, telling him what they like about the footwear styles, and explaining what could be improved.
Back on the stand, Madden is getting distracted just 10 minutes into the interview with Drapers and he is itching to carry on selling product to his customers. As the interview ends, there is no formal goodbye or handshake as he jumps up and makes one final point.
“I’m a bulldog, I’m a do-er and a creator. I forge ahead,” he says. Who could argue with that?
Steve Madden CV
2007 Agrees hosiery licence deal
2006 Steven Madden Ltd brand named company of the year by Footwear News
2005 Introduces new licence agreement for handbags and accessories
2002 The brand makes its first internet sale
1993 Takes Steve Madden public. Opens his first store, in SoHo, NYC
1990 Founds Steve Madden brand