Steven Madden Inc. has acquired Big Buddha Inc., the better-priced accessories line founded by Jeremy Bassan.
Madden purchased the firm for $11 million in cash plus certain earn-out provisions that are based on financial performance through 2013. Bassan said he will stay on to oversee the line, which will move from its Santa Cruz, Calif., headquarters to Madden’s facility in Long Island City, N.Y.
“We’ve bought the bags for our stores in the past and they’ve been fantastic, and we love that it’s a young company with tremendous value,” founder Steve Madden said. “We want to help with their distribution both domestically and internationally, and the bags really fit in with what we’re doing.”
Since its 2003 inception, Big Buddha has produced better-priced accessories for department stores and online retailers, such as Dillard’s and Piperlime.com. In 2009, Big Buddha had net sales of $13 million.
The acquisition marks a new direction for Madden, which in September posted third-quarter net sales of $140.1 million. It recently bought a 50 percent stake in Upper Echelon Shoes and nine months ago purchased another small accessories firm, Zone 88.
“The analogy would be is if we were a movie company, we’d be investing in more ‘indie’ projects, although we’re open to all sorts of deals,” Madden said. “We have a healthy balance sheet, we’re a cash-rich company and we’re applying it. It seems to be something we’re moving towards.”
Steve Madden is also expanding its breadth beyond footwear. It recently launched jewelry in partnership with Lucas Design International and operates several other licenses, including apparel, eyewear, hosiery, and bedding and bath products.
Financo Inc. acted as financial adviser for Big Buddha. William Susman, president and chief operating officer of Financo, said, “Steve Madden will be able to add to their portfolio a hot, relevant growing brand that has great potential. Big Buddha’s handbag capabilities can also add leverage and benefits to the current Steve Madden handbag operations.”