Steve Madden is creating quite a buzz on Wall Street. Several years after starting his company in New York City, Steve Madden pleaded guilty to securities fraud and money laundering in 2001, was in prison until 2005. Investors forgave him and he returned to Steve Madden Ltd in 2006 as the creative and design chief. He has been the driving force behind it’s designs and has been helping recreate their business model. They made it quick on its feet. The ingenious way it introduces new designs puts them way ahead of the marketing curve.
They call it “test and release.” The company makes models at its Queens, N.Y., headquarters, where it has a mini-factory that can turn a concept into a shoe in less than a day. They then sell and monitor shoe models in a select number of its New York stores and on its Web site to determine fashion and inventory risks. After several weeks of observation, they decide whether a model can go to China for mass production and be distributed in retail stores. This “test and release” method allows them to put shoes in mass production on about 12 weeks, where typically it takes a footwear company about 5 months to release shoes.
Steven Madden Ltd has license agreements with Fabulosity, Elizabeth and James, l.e.i. for shoes, and for handbags and belts with Betsey Johnson and Daisy Fuentes. With this licensing, Steve Madden Ltd is in stores that cover the entire spectrum from Walmart (l.e.i.) to Bergdorf Goodman (Elizabeth and James) and it’s paying off. Steve Madden raised its 2009 per-share profit target in late April from $1.85 to $1.95, well above the $1.47 analysts had been expecting.Revenue grew 7%, also topping estimates. It’s stock is regarded as a good buy. I am watching to see how it does the next few quarters. Maybe I will put more than Monopoly money on it.
Elisabeth and James should be in stores this fall. Nordstroms is pre-selling items, but none of the other websites have any shoes listed yet.
OK, this wedge is part of the Elizabeth and James line that Nordstroms was pre-selling for about $325. By the time I could get things posted they had sold out. No wonder. It is adorable. It will show up later on in the season, so I will have to wait.
So, shoes offered by Steve Madden LTD range from $17 to 325. These designs are what we are seeing virtually everywhere else. They are meeting the demands of the general public, which is the name of the business game. I am disappointed there doesn’t seem to be anything unusual or outstanding. I am going to have to go somewhere else for that.