Inside Steve Madden: What’s Driving the $2B Firm’s Bullish 2024 Forecast

“I could tell you the hottest shoe from 1980 to now.” Sitting on a stool inside PMC Studios in New York, Steve Madden — wearing his signature Yankees cap — 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 ’90s style and became an instant favorite among teen girls.

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

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At a time when industry turnover is rampant, this trio has been together for almost two decades — 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.

Newton Varela began her career with Madden in 1998 as the account executive for the women’s wholesale division, ultimately becoming president in 2015. Rosenfeld joined the executive management team in May 2005 before rising to CEO in 2008.

“One of the great things is that we all have different skill sets,” Madden said during a conversation with Rosenfeld and Newton Varela. “We also share a value system. We have certain principles in our company that we all deeply believe in.”

The leaders, united in their vision, have been working closely together to navigate a complex footwear climate. Reflecting on a particularly difficult 2023, Rosenfeld calls it a “once-in-a-generation dynamic,” particularly in wholesale. But amid broader industry recovery, the company is bullish about a brighter 2024.

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, “They are one of the first brands to identify footwear trends and can move with speed to maximize the moment with product.”

“We’re positioned nicely,” Madden said. “Inflation is coming to an end — maybe. We thought we were going to have a very nasty recession and we’re not. Everybody’s kind of breathing a
sigh of relief.”

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 in October for $52 million, following its purchase of contemporary brand BB Dakota in 2019.

“I’m excited to see shoes, handbags and apparel all clicking at the same time,” Newton Varela said.
Madden, a master of collaboration, isn’t 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.

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. “She’s a young woman trying
to make her way, and I dig that,” said Madden.

“We’re both very strong-minded, take-it-or-leave-it type of people and we get business done no matter what,” said Rich of the collab. “His consistency, work ethic and his business have proven [that] over the last 30 years. Steve Madden believing in me and my brand is validation.”

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.

Why does your partnership still work after all these years?
Amelia Newton Varela: “We’re 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’re a big company, but we run it like a small company. We’re always thinking of everything.”
Ed Rosenfeld: “We 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 — 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.”
Steve Madden: “We have a responsibility to care about what we do and not take it for granted — 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’s 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’s obviously worked very well, and it’s one of the things I’m most proud of. It wasn’t done like that back then.”

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

What are the biggest ways the business has changed since you started out?
ANV: “You’re in consumers’ 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’s when you saw the ad. Now it’s constant. It’s a complete game changer. The influencers are the ones driving sales. It’s a completely different industry to me now.”
ER: “The industry is always evolving. And there’s 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’s what matters. If you’re consistent with that, you’ll be OK.”

As the industry continues to shift and evolve, what sets Steve Madden apart after all these years?
ER: “Product has always been what separates us from others. We always focus on that. That doesn’t change. We have to make sure that we’re also continuing to raise our game in terms of marketing and consumer engagement. But it’s always going to be product first.”
ANV: “We could be in a meeting going over next year’s budgets, but if the design team comes in with a shoe, everything stops and we focus on that. Product is first. Then it’s all about our speed to market and constant testing and reacting. That’s what keeps us different from our competition.”

How has your sourcing strategy evolved with the China landscape becoming more complicated?
ANV: “We work with Mexico, and we do a lot in Brazil. We’ll continue with some China production. But we haven’t slowed down at all. If anything, I think we’re going to be getting faster.”

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?
ER: “Last 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’s 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’re positioned to see a recovery in that business, which is so core to us in 2024.”

Has your target consumer evolved? Where is your sweet spot today?
ANV: “We 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.”
SM: “We just try to make cool shoes and that’s 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.”

Every brand wants to figure out how to win over Gen Z. Amelia and Steve, do you use your teens as sounding boards?
SM: “All of my kids are a big influence. My daughter Stevie wears Sambas and it makes me crazy. It’s heartbreaking. It’s about what they’re listening [to], what they’re watching — that kind of inspiration.”
ANV: “I 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’re wearing, so I’m always asking questions. I know Steve gets crazy with Sambas. I get crazy with Uggs.”

In terms of categories, what are you seeing as the biggest opportunity?
ANV: “Dress. I’m seeing a lot of closed-toe, open-back footwear happening. And I feel like the girl doesn’t 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’re happy about that. I’m excited about spring.”

Steve, you’ve made many hit shoes — the Mary Lou and the Slinky are just two examples. How do you strike gold like that now?
SM: “I always think, ‘Could this be it?’ It’s always possible. It’s no different than before. It’s just the way you reach them now. The stars have to be aligned. It’s an amazing thing when it happens. I think about what makes a big song. It’s a wonderful mystery that I love.”

Earlier today, you mentioned the viral mob wife aesthetic that’s trending on TikTok. How do you organically immerse yourself in that conversation and other TikTok trends?
SM: “We’ve sort of always had a little ‘mob wife’ vibe. We were voted number-one organized crime.” [laughs]
ER: “[That is an example] where we would take a shoe that we already have in leopard and style it [for the trend].”
ANV: “Sometimes the items emerge. We know it’s a good item, but we don’t know how big it’s going to be. And then you go on TikTok, it’s there. From there, it’s all about what we do best, chasing and reacting. That’s why speed is important when something emerges within the season.”

You’ve been aggressive about expanding into categories beyond footwear. Talk about your strategy there and what’s working.
ER: “Handbags 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’re pleased with what we’re seeing there. And then we also did another acquisition at the tail end of last year — Almost Famous — which rounds out our apparel capability. It’s complementary because the Steve Madden business is [focused] on contemporary styling and [targeted to] premium channels. This gives us a business that’s focused on more value-priced channels.”

Getting the wholesale/direct-to-consumer balance right has been a challenge for every company. How are you approaching this strategy?
ER: “DTC has become increasingly important for us. It’s 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’s half. That’s obviously a continued focus because we want to be where our customers are. But [online] is not the only place they are. We’re still focused on brick-and-mortar and on wholesale.”

What is in the pipeline for your physical stores this year?
ER: “We’re 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’re also investing in the U.S. stores via remodels. We’re refreshing the fleet, kicking off with our Times Square location.”

Internationally, where do you see the biggest opportunity?
ER: “Europe has been the biggest and fastest-growing market for us over the
last several years. We’re also excited about the Middle East.”

You’re focused on looking ahead, but let’s look back for a minute. What advice would you give your younger self?
ANV: “Live in the solution more and worry less. When I was younger, I stressed out so much, but I wasn’t living in the solution. It took me time, as I grew, to focus on that.”
ER: “I would tell myself that you can take your job very seriously and still be able to sleep at night.”
SM: “I would say, you know, you’re not that ugly. That’s the answer.”