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Steven Madden (SHOO)Stock (Apparel - Footwear & Accessories Industry, Apparel Footware and Accessories Industry, Fashion Industry Industry)
Though its revenue decreased 9.3% in 2007 bringing in $431 million, the company saw a 12% revenue year-on-year increase by the end of the third quarter of 2008.[2] Along with its increasing revenues, Steven Madden continues to increase its size with its .8% employee growth and has branched into the bed and bath market. [3]
[edit] Company OverviewSteven Madden, Ltd. makes its profits by designing, producing and distributing products through its retail stores, its website, and department stores. It also profits from its licensing agreements. The company monitors all its segments through three divisions: [edit] Wholesale Divisions (63% of Total Revenue) Madden Womens is the most profitable segment, generating $127.8 million in 2007, approximately 30% of total net sales. Steve Madden Mens generated 12%. [6] Both segments target fashion conscious individuals between 16 to 35. Steven products are priced a tier higher than Steve Madden’s and is a more sophisticated line for women 26 to 40, sold in higher-end department stores. Steven had 4% of net sales in 2007. [7] Steven Madden’s Fix is the athletic line of footwear and barely brought revenues with only $.4 million in 2007. Madden Girl, which is designed for teens brought in 7% and Stevies, which is designed for kids brought in 2%. [8] Candie’s, Inc. generated 5% of net sales through its products for women and kids. Candie’s is sold exclusively at Kohl’s through the companies contract bound till 2010. After the contract expires, the company hopes to sell the product in other retail stores. [9] Finally, the Daniel M. Friedman Division marketed and sold $54.5 million for the year of 2007, or approximately 13% of total net sales. [10] [edit] Retail Division (28% of Total Revenue)The Retail Division operates the 100 retail stores, 94 under the name Steve Madden and 6 under Steven, which sell the company’s products. Along with the stores, the company has a website www.stevemadden.com, where it sells Steve Madden and Steven products. [11] Sales from the stores and website decreased 7.6% in 2007 compared to 2006. The Retail Division generated about 28% of total net sales. [12] In 2008, the company plans on adding 3 new stores. The Retail Division also acts as a test site for the product development of the Wholesale Division because it enables the company to test the reaction to new products. This gages whether or not it wants to sell those products in Wholesales. [13] [edit] First Cost Division (9% of Total Revenue)First Cost is the buying agent of the company. The segment obtains mass amounts of footwear from manufacturers and sells them non-branded to large retailers including Target and Wal-Mart. The mass merchandising market allows the company to sell the products at lower prices in order to target a different demographic. In 2007, the division brought in $14.7 million in revenue. [14] [edit] Trends and Forces[edit] Dependence on customers could hurt company revenuesSteven Madden. Ltd. sells the majority of its footwear and accessories through department stores and its other customer apparel and footwear specialty stores. However, contracts for its lines happen every season; the company does not enter into long-term agreements with any of its customers. The company states that 84% of its products sold through Department stores are at risk. [15] Therefore, when major department stores are affected by competitive conditions or financial difficulties, it decreases the amount of merchandise purchased and effects Steven Madden’s revenue. In 2007, when retail revenues were down from 13% due to U.S. economic cycles, sales to the company’s customer base decreased 15%, compared to a 10.5% increase in 2006. [16] [edit] Addition of new stores and products proves to be a positiveThe company has begun the building of three additional retail stores, announced it was adding a bed and bath line, and has expanded distribution overseas. In November 2008, an agreement was signed with Revman International Inc. to design, make and sell a bed and bath collection under the Steven Madden logo. The line will be available in spring of 2009. [17] Internationally, the company acquired Diva International, Inc. in order to distribute and sell products around the world. Revenues increased 300% since the acquisition of Diva International in 1994. The company continues to add stores and customers in Canada, Europe, Central and South America, Australia and Asia. [18] [edit] Crisis with NASDAQ Audit CommitteeIn August 2008, due to the resignation of Walter Yetnikoff from the company's board of directors, Steven Madden, Inc. received a notification form The NASDAQ Stock Market stating that the company no longer complies with the audit committee requirements. [19] NASDAQ's audit committee requirements require three independent directors for monitoring the group. They company has until the next shareholders’ meeting to find a new member. Though this announcement did not effect 2008 quarter 3 revenues (12% y-o-y increase), it has taken a lot of time and resources away from the company. [20] Failure to comply will also result in reprimands for the company. [edit] Competition and Market ShareSteven Madden, Inc. had revenue of $431 million in 2007. The fashion footwear industry is highly competitive. Many of the company’s competitors have a greater amount of finances and other resources, as well as a broad range of other products that go beyond footwear and accessories.
 Steven Madden2004 Data 2005 Data 2006 Data 2007 Data 2008 Data Most Recent Data Available [edit] References
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