Byline: Vicki M. Young

NEW YORK — As Steven Madden Ltd. begins to explore its strategic options, potential buyers need to consider the value of the brand name in the event the company’s founder becomes unable to provide ongoing creative services to the firm.
That’s the advice of one analyst whose firm recently dropped coverage of the company. “Future brand value is first and foremost a concern that should be high on any purchaser’s agenda,” the analyst said, requesting anonymity. “The company would be a nice acquisition for a lot of firms and would be accretive to earnings. However, if Steve Madden becomes unable to oversee design, who’s to say whether the company or a new owner can keep [the momentum in] driving the brand?”
The footwear firm said Monday it had retained Bear Stearns as its financial adviser to explore strategic alternatives to maximizing shareholder value. The company did not rule out the possibility of a sale of its assets.
Following Monday’s announcement, shares of the company inched up 13 cents to close at $8.75, but reversed on Tuesday, dropping 31 cents to close at $8.44 in over-the-counter trading. The 52-week high is $22.69 and the low $5.50.
Charles Koppelman, acting chairman of Steven Madden Ltd., explained in a statement Monday, “The company’s excellent financial performance, including 16 consecutive quarters of revenue and profit growth and the successful expansion of its retail and wholesale businesses, has not been reflected in our stock price performance. The board of directors believes it is in the best interest of all our shareholders for us to evaluate all possible strategic options.”
As reported, Koppelman assumed the interim chairmanship position in June, following the indictments against the company’s founder Steve Madden. He was indicted in two separate criminal cases, one in Manhattan federal court and the other in Brooklyn federal court, alleging his participation in schemes to manipulate initial public offerings, including the 1993 IPO of his own company. Madden, who stayed on as chief executive, is out on bail of $1.5 million, or $750,00 in each of the two criminal cases. Madden is contesting the charges in both cases.
The analyst, whose firm recently dropped coverage, speculated that the company wouldn’t be exploring its strategic options — even if the stock price was as low as it is — if it weren’t for the founder’s legal troubles.
Another footwear analyst, who also requested anonymity, agreed that the ceo’s legal troubles are likely a contributing factor in the firm’s review of its options, even though the firm itself is not under any scrutiny by the government.
Neither the ceo nor his attorney could be reached for comment.

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