Steven Madden Ltd. is lending a hand to, and taking a stake in, one of its accounts.

 

Bakers Footwear Group Inc. has received a $5 million debt and equity investment from Madden, which will wind up with a nearly one-fifth stake of the retailer’s equity.

 

The net proceeds of $4.6 million, after transactions costs, will be used for working capital purposes. The $5 million note has an interest rate of 11 percent, with principal payments due between 2017 and 2020.

 

Steven Madden also will be issued 1.8 million shares of common stock as additional consideration for the loan, giving it a 19.99 percent interest in the chain. Bakers said there are restrictions on transferring or acquiring additional Bakers’ securities. In addition, Bakers entered into various consents, waivers and agreements with its senior lenders to accommodate the transaction.

 

The investment does not include any financial covenants or sourcing, management or governance conditions of any kind, according to Peter Edison, chief executive officer of Bakers. The company also said Madden, a 20-year supplier of Bakers, has agreed to vote its shares in the “same manner” as Edison.

 

Madden is among Bakers’ biggest suppliers and has done business with the chain for 20 years.

 

Edward Rosenfeld, chairman and ceo of Madden, said, “We are very pleased to provide financial support to Bakers. Our companies have enjoyed a long-standing relationship, and we look forward to continued success. We believe this investment will be beneficial to both of our companies.”

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