{"id":1203587426,"date":"2024-02-05T09:08:32","date_gmt":"2024-02-05T14:08:32","guid":{"rendered":"https:\/\/footwearnews.com\/?p=1203587426"},"modified":"2024-02-06T10:50:12","modified_gmt":"2024-02-06T15:50:12","slug":"steve-madden-interview-2-billion-company","status":"publish","type":"post","link":"https:\/\/footwearnews.com\/business\/business-news\/steve-madden-interview-2-billion-company-1203587426\/","title":{"rendered":"Inside Steve Madden: What\u2019s Driving the $2B Firm\u2019s Bullish 2024 Forecast"},"content":{"rendered":"


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\u201cI could tell you the hottest shoe from 1980 to now.\u201d Sitting on a stool inside PMC Studios in New York, Steve Madden \u2014 wearing his signature Yankees cap \u2014 is reflecting on some of his own greatest hits through the years. He lights up when he talks about the Mary Lou, the big-toed patent leather Mary Jane that defined \u201990s style and became an instant favorite among teen girls.<\/p>\n

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More than three decades after launching his namesake firm, Madden is still the same consummate product guy. Creating is what drives the founder \u2014 and it\u2019s his biggest strength. That\u2019s why Madden has long relied on his two loyal partners \u2014 chief executive officer Ed Rosenfeld and president Amelia Newton Varela \u2014 to execute the business vision.<\/p>\n

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At a time when industry turnover<\/a> is rampant, this trio has been together for almost two decades \u2014 transforming the company from a single brand into a $2 billion powerhouse that also includes Dolce Vita, Betsey Johnson, Blondo, Greats and the licenses for Anne Klein footwear and handbags.<\/p>\n

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Newton Varela began her career with Madden in 1998 as the account executive for the women\u2019s wholesale division, ultimately becoming president in 2015. Rosenfeld joined the executive management team in May 2005 before rising to CEO in 2008.<\/p>\n

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\u201cOne of the great things is that we all have different skill sets,\u201d Madden said during a conversation with Rosenfeld and Newton Varela. \u201cWe also share a value system. We have certain principles in our company that we all deeply believe in.\u201d<\/p>\n

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The leaders, united in their vision, have been working closely together to navigate a complex footwear climate. Reflecting on a particularly difficult 2023<\/a>, Rosenfeld calls it a \u201conce-in-a-generation dynamic,\u201d particularly in wholesale. But amid broader industry recovery, the company is bullish about a brighter 2024.<\/p>\n

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Tacey Powers, Nordstrom executive vice president and general merchandise manager for shoes, said the brand continues to resonate with consumers for its aspirational design at an accessible price point. She said, \u201cThey are one of the first brands to identify footwear trends and can move with speed to maximize the moment with product.\u201d<\/p>\n

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\u201cWe\u2019re positioned nicely,\u201d Madden said. \u201cInflation is coming to an end \u2014 maybe. We thought we were going to have a very nasty recession and we\u2019re not. Everybody\u2019s kind of breathing a
sigh of relief.\u201d <\/p>\n

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As one of the most acquisitive footwear players, the company has been expanding its apparel business through a series of deals. Madden snapped up Almost Famous<\/a> in October for $52 million, following its purchase of contemporary brand BB Dakota in 2019.<\/p>\n

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\u201cI\u2019m excited to see shoes, handbags and apparel all clicking at the same time,\u201d Newton Varela said.
Madden, a master of collaboration, isn\u2019t slowing down on that front either. The founder has always had his finger on the pulse of the cultural zeitgeist, teaming with Cardi B, Olivia Jade, Sydney Sweeney, Caroline Vreeland, Winnie Harlow, the Olsen twins and more through the years.<\/p>\n

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In March, Madden will debut a collaboration with rising designer Jessica Rich, who took home the Emerging Talent Award at the 2022 FN Achievement Awards. \u201cShe\u2019s a young woman trying
to make her way, and I dig that,\u201d said Madden.<\/p>\n

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\u201cWe\u2019re both very strong-minded, take-it-or-leave-it type of people and we get business done no matter what,\u201d said Rich of the collab. \u201cHis consistency, work ethic and his business have proven [that] over the last 30 years. Steve Madden believing in me and my brand is validation.\u201d <\/p>\n

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Here, Madden and his team sit down for their first joint interview to discuss their unwavering dedication to the job, hybrid work and the road ahead.<\/p>\n

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Why does your partnership still work after all these years?<\/strong>
Amelia Newton Varela:<\/strong> \u201cWe\u2019re brainwashed [laughs]. Every day is a new day. It keeps it interesting. If you have a good work ethic and passion, you usually do well here. We\u2019re a big company, but we run it like a small company. We\u2019re always thinking of everything.\u201d
Ed Rosenfeld: <\/strong>\u201cWe share a similar work ethic. You have to care a lot. No matter how big we get or how the business changes, we work hard to make sure we stay scrappy, entrepreneurial and gritty \u2014 and that we move fast and act with a sense of urgency. That has been important to me since I started, and it remains so.\u201d
Steve Madden:<\/strong> \u201cWe have a responsibility to care about what we do and not take it for granted \u2014 to understand that if the firm does well, more people get to work. If we make more money, then more people get jobs and health insurance. And all three of us think about that. We think about the consequences of not doing well. There\u2019s a lot of respect for our work. We tend to like self-starters. It was very outside the box when we appointed Ed [a former finance and banking executive] as CEO. It\u2019s obviously worked very well, and it\u2019s one of the things I\u2019m most proud of. It wasn\u2019t done like that back then.\u201d<\/p>\n

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You\u2019ve always focused on cultivating a distinct culture, and in this hybrid era you\u2019re in the office four days a week. Do you think being together in person is critical to Steve Madden\u2019s success?<\/strong>
ANV:<\/strong> \u201cYes, I do. We\u2019re in the fashion business. It\u2019s moving fast.\u201d
SM:<\/strong> \u201cI agree with her. And I disagree with her. Like, let\u2019s go back to work. But one must be aware of the marketplace now. The world has changed. It\u2019s tricky. I was totally against [remote]. And now I think it\u2019s good for recruitment to [enable us to get] top, talented people. It\u2019s a benefit. And one needs to be thoughtful about it.\u201d<\/p>\n

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What are the biggest ways the business has changed since you started out?<\/strong>
ANV:<\/strong> \u201cYou\u2019re in consumers\u2019 faces every day, all day long. In the past, you would just see a billboard when you passed. Or when you opened up the magazine, that\u2019s when you saw the ad. Now it\u2019s constant. It\u2019s a complete game changer. The influencers are the ones driving sales. It\u2019s a completely different industry to me now.\u201d
ER:<\/strong> \u201cThe industry is always evolving. And there\u2019s lots of continual change in terms of styling and consumer behavior and distribution channels, but I also think some things remain the same. Like great brands, products, customer experiences, that\u2019s what matters. If you\u2019re consistent with that, you\u2019ll be OK.\u201d<\/p>\n

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As the industry continues to shift and evolve, what sets Steve Madden apart after all these years?<\/strong>
ER:<\/strong> \u201cProduct has always been what separates us from others. We always focus on that. That doesn\u2019t change. We have to make sure that we\u2019re also continuing to raise our game in terms of marketing and consumer engagement. But it\u2019s always going to be product first.\u201d
ANV:<\/strong> \u201cWe could be in a meeting going over next year\u2019s budgets, but if the design team comes in with a shoe, everything stops and we focus on that. Product is first. Then it\u2019s all about our speed to market and constant testing and reacting. That\u2019s what keeps us different from our competition.\u201d<\/p>\n

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How has your sourcing strategy evolved with the China landscape becoming more complicated?<\/strong>
ANV:<\/strong> \u201cWe work with Mexico, and we do a lot in Brazil. We\u2019ll continue with some China production. But we haven\u2019t slowed down at all. If anything, I think we\u2019re going to be getting faster.\u201d<\/p>\n

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The weakness in the wholesale business last year impacted Steve Madden more than some of your competitors. What is your outlook for this channel going forward and how important is it to your future?<\/strong>
ER:<\/strong> \u201cLast year was a uniquely challenging dynamic in the wholesale business, particularly in the U.S. Virtually every major retailer at the end of 2022 found themselves with way too much inventory. They went into 2023 pulling back, and that definitely impacted us because that\u2019s a big part of our business. The good news now is that almost all those retailers have their inventories much more in line. The channel is much healthier, so I do think we\u2019re positioned to see a recovery in that business, which is so core to us in 2024.\u201d<\/p>\n

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Has your target consumer evolved? Where is your sweet spot today?<\/strong>
ANV:<\/strong> \u201cWe continue to hit all ages. We want that young girl coming in because once we get her, we have her. And we also still want the mom buying for her kid.\u201d
SM:<\/strong> \u201cWe just try to make cool shoes and that\u2019s it. We let the chips fall where they may. People put us into little slots. But the shoes are quite universal. And particularly when you get out of the coasts, they tend to skew older.\u201d<\/p>\n

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Every brand wants to figure out how to win over Gen Z. Amelia and Steve, do you use your teens as sounding boards?<\/strong>
SM:<\/strong> \u201cAll of my kids are a big influence. My daughter Stevie wears Sambas and it makes me crazy. It\u2019s heartbreaking. It\u2019s about what they\u2019re listening [to], what they\u2019re watching \u2014 that kind of inspiration.\u201d
ANV:<\/strong> \u201cI have a son who is 14. I look at his little friend group and the girls who come over. I see the shoes they leave by the doorway and what they\u2019re wearing, so I\u2019m always asking questions. I know Steve gets crazy with Sambas. I get crazy with Uggs.\u201d<\/p>\n

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In terms of categories, what are you seeing as the biggest opportunity?<\/strong>
ANV:<\/strong> \u201cDress. I\u2019m seeing a lot of closed-toe, open-back footwear happening. And I feel like the girl doesn\u2019t have it in her closet. Kitten heels, slingbacks, and sneakers continue. Flat sandals are still important. In that category, I would say footbeds are going to continue. All our embellished flats have been getting excellent reads, so we\u2019re happy about that. I\u2019m excited about spring.\u201d<\/p>\n

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Steve, you\u2019ve made many hit shoes \u2014 the Mary Lou and the Slinky are just two examples. How do you strike gold like that now?<\/strong>
SM:<\/strong> \u201cI always think, \u2018Could this be it?\u2019 It\u2019s always possible. It\u2019s no different than before. It\u2019s just the way you reach them now. The stars have to be aligned. It\u2019s an amazing thing when it happens. I think about what makes a big song. It\u2019s a wonderful mystery that I love.\u201d<\/p>\n

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Earlier today, you mentioned the viral mob wife aesthetic that\u2019s trending on TikTok. How do you organically immerse yourself in that conversation and other TikTok trends?<\/strong>
SM:<\/strong> \u201cWe\u2019ve sort of always had a little \u2018mob wife\u2019 vibe. We were voted number-one organized crime.\u201d [laughs]
ER:<\/strong> \u201c[That is an example] where we would take a shoe that we already have in leopard and style it [for the trend].\u201d
ANV:<\/strong> \u201cSometimes the items emerge. We know it\u2019s a good item, but we don\u2019t know how big it\u2019s going to be. And then you go on TikTok, it\u2019s there. From there, it\u2019s all about what we do best, chasing and reacting. That\u2019s why speed is important when something emerges within the season.\u201d<\/p>\n

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You\u2019ve been aggressive about expanding into categories beyond footwear. Talk about your strategy there and what\u2019s working.<\/strong>
ER: <\/strong>\u201cHandbags and apparel have been growing rapidly for us. Non-shoe categories are 25 percent of our business now. We bought BB Dakota in 2019 and converted that to Steve Madden Apparel. We\u2019re pleased with what we\u2019re seeing there. And then we also did another acquisition at the tail end of last year \u2014 Almost Famous \u2014 which rounds out our apparel capability. It\u2019s complementary because the Steve Madden business is [focused] on contemporary styling and [targeted to] premium channels. This gives us a business that\u2019s focused on more value-priced channels.\u201d<\/p>\n

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Getting the wholesale\/direct-to-consumer balance right has been a challenge for every company. How are you approaching this strategy?<\/strong>
ER:<\/strong> \u201cDTC has become increasingly important for us. It\u2019s up over 50 percent since pre-COVID. Most of that has been driven by digital. Digital used to be a little over a quarter of our DTC business, now it\u2019s half. That\u2019s obviously a continued focus because we want to be where our customers are. But [online] is not the only place they are. We\u2019re still focused on brick-and-mortar and on wholesale.\u201d<\/p>\n

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What is in the pipeline for your physical stores this year?<\/strong>
ER:<\/strong> \u201cWe\u2019re going to add to the store base, mostly outside the U.S. [Seven openings are planned for the Middle East, two in Canada, two in Mexico, two in South Africa and one in Europe.] We\u2019re also investing in the U.S. stores via remodels. We\u2019re refreshing the fleet, kicking off with our Times Square location.\u201d<\/p>\n

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Internationally, where do you see the biggest opportunity?<\/strong>
ER:<\/strong> \u201cEurope has been the biggest and fastest-growing market for us over the
last several years. We\u2019re also excited about the Middle East.\u201d<\/p>\n

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You\u2019re focused on looking ahead, but let\u2019s look back for a minute. What advice would you give your younger self?<\/strong>
ANV: <\/strong>\u201cLive in the solution more and worry less. When I was younger, I stressed out so much, but I wasn\u2019t living in the solution. It took me time, as I grew, to focus on that.\u201d
ER: <\/strong>\u201cI would tell myself that you can take your job very seriously and still be able to sleep at night.\u201d
SM: <\/strong>\u201cI would say, you know, you\u2019re not that ugly. That\u2019s the answer.\u201d <\/p>\n

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