NEW YORK — Steven Madden Ltd. is branching out slowly but surely.

This story first appeared in the June 6, 2002 issue of WWD. Subscribe Today.

A mere 12 months ago, Madden was focused on women’s shoes. Since then, the company has expanded with licensed accessories, including handbags, belts, sunglasses and socks; licensed outerwear, and, most recently, men’s shoes. And the idea of licensing sportswear, denim, cosmetics and fragrances is in the future, according to Jamie Karson, chief executive officer of Steven Madden Ltd.

While Madden is looking for eventual partners, there are no immediate plans to sign licenses. “We are always very careful with new products,” Karson said. “We test them in our own boutiques first and then if they do well, we show them to our wholesale clients.”

Right now, the company has placed a small collection of terry cloth and velour sets in some of the 74 Steve Madden boutiques to work with its athletic sneakers, but according to Karson, no license agreement has been signed to further expand the line. The men’s shoe collection, which launched last year, has performed very well at retail, raking in $10 million in the first year. Karson said the company expects that number to triple before the end of 2002.

As for the future, Rob Schmertz, president of Steve Madden wholesale and brand management, said that, strategically, if Madden signs any more licenses, apparel will come first.

“It will only add to the lifestyle of the brand to hold off on licensing until it is right,” Schmertz said. “We take a tremendous amount of pride in our products and our vision is to first provide the coolest shoes that can be made. That is and has always been Steve’s vision.”

When Madden begins serving his jail sentence at the end of the summer, he is confident that he has left his company in good hands with Karson and Schmertz at the helm. In fact, Schmertz said that he and Madden seem to be so alike, some retailers confuse the two.

“We are and have been preparing for the day that Steve isn’t here for a while,” Karson said. “We are taking steps to prepare for it. But he will be back and the company will be here.”

In total, Steven Madden Ltd. experienced strong increases in its first quarter. Sales ran 24.8 percent higher, to $66.6 million from $53.4 million in the year-ago quarter. Wholesale sales increased 24.9 percent to $47.8 million, while its retail business increased 24.4 percent to $18.8 million. Comparable-store sales in the retail unit rose 14 percent and were driven by the early transition to spring merchandise, mild weather and benefits of the Easter calendar shift.

“The only thing these girls and men want are cool shoes. The product speaks for itself. Some know about what has been going on with Steve and some don’t,” Schmertz said. “If the product is right, it doesn’t matter.”

As for Madden, he is still involved with the business as a creative and design chief and his vision is to keep focused on becoming an American lifestyle brand. In many ways, Karson said he likes to compare Steve Madden with other American design houses such as Tommy Hilfiger, Ralph Lauren and Kenneth Cole.

“We look up to other companies that put their label on products that they are not necessarily known for,” Karson said. “If they can do that and be successful, then we know their brand is good.”

Madden agreed.

“We pride ourselves as American. I don’t like to travel, I love this country and don’t think there are any other companies out there exactly like us,” he said, pointing out that there are few shoe companies based in the U.S. “I mean, Italy is shaped like a boot.”

Besides Steve Madden and Stevies brands, the company owns and operates two retail locations under its David Aaron brand and is the licensee for LEI footwear.

While he has yet to begin serving any jail time, Madden, as reported, was recently sentenced in a Brooklyn court on charges of securities fraud and money laundering involving defunct brokerage firm Stratton Oakmont, including the 1993 initial public offering of his own firm. He was sentenced on April 4 in Manhattan for stock manipulation involving IPOs underwritten by Monroe Parker Securities Inc., also defunct.

In total, the 45-year-old Madden has been given 41 months in prison for the Brooklyn counts, to be served concurrently with the 41-month term received in the Manhattan case. Madden will also serve an additional year of supervised release.

But Madden is thinking positively about the future of the company and he sticks to the philosophy he’s had since 1987.

“When all else fails, make a new shoe,” he said.”

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