SYDNEY — Steve Madden is heading to court down under.
The Supreme Court of Victoria determined that South Yarra, Victoria-based Lew Footwear Holdings Pty Ltd., Madden’s erstwhile Australian licensee, had “a strongly arguable case” that Madden International Ltd. breached Australian trade practices legislation, dismissing an application by Madden International to have the proceedings stayed.
At the center of the dispute is the pricing structure of Madden’s products that were supplied on an agreed costs basis, which was to be the factory cost plus reasonable costs of sampling, testing, agent and other various fees, with such reasonable costs not to exceed 13 percent.
Lew Footwear alleges that Madden International overcharged on a number of occasions and later acknowledged this, undertaking to cease doing so, but continued regardless.
Lew Footwear is part of the Lew group of companies that is owned by Australian retail magnate Solomon Lew.
In November 2009, the company was appointed the exclusive distributor of Steve Madden footwear and accessories in Australia and New Zealand for a period of approximately five years. Fifteen standalone Steve Madden stores subsequently opened across Australia. All were closed by June 2014.
Although the licensing agreement had provided that the governing laws of the contract were the laws of the state of New York and that the parties were to litigate any matter in U.S. courts, Lew Footwear commenced legal proceedings in Victoria earlier this year.
“We believe Madden’s conduct in inducing us to enter into a license agreement by misleading and deceptive conduct and its failure to comply with the terms of our mutually agreed license agreement, including the agreed pricing terms, is a breach of Australian trade practices law” a spokesperson for Lew Footwear Holdings told WWD. “We are pleased to be able to pursue this matter through the Australian courts, despite attempts by Madden’s lawyers to have the case shifted to New York.”
A representative at Madden International’s Hong Kong office declined to comment. Officials at Madden headquarters could not immediately be reached for comment.