Steven Madden was born in Queens, New York in the late 1950’s. Steve was the son of a textile manufacturer and was in high school when he started off with his first job at a shoe store. He came fully immersed into the shoe business from his first job and after two years enrolled in the University of Miami. He majored in entrepreneurship and was interested in opening up his own shoe company one day. After a couple of semesters, his dad dragged him out of school after flunking out from partying too hard and shipped him back to New York City. When he decided he didn’t want to go back to school, he took a sales job at Jildor, which is a popular shoe store in Cedarhurst. His former boss, Jan Friedman states him being “one of the most natural-born salesman I’ve ever seen. He could sell anything to anybody” (Crisis of the Sole, n.d). In the early 1980’s, he began working for a wholesale firm called L.J. Simone. During his time working, he learned all about marketing and how shoes were manufactured. After he left his job and soaked up all of the knowledge he could get, he attempted to launch a brand of women’s shoes called Souliers for the MCM company. His venture was unsuccessful and he began his journey from start again.
“In 1990, Steve Madden found Steven Madden, Ltd. He started out with 500 pairs of shoes and made his own designs and sold them around the New York city area stores front the trunk of his car” (Lewis, 2019). With only $1,000 in his pocket, he decided to design his first show called the Marilyn which was a piece of the western clog.His first major success from his shoe brand was called the Mary Lou. It was a style based off the Mary Jane style of a women’s shoe. It was a patent leather show with a big bump toe that won the hearts of many teen girls. Steve recalls getting “tons of calls from mothers along the tri-state area. At least 15 calls a day because kids had nothing to wear to bat mitzvahs and this was going to be something big” (Crisis of the Sole, n.d).
In 1993, he landed his first retail store opening and in that same year he began to see his capital increase. He opened his first shoe store on Broadway in SoHo. He gave the responsibility of offering stock to the Long Island securities firm of Stratton Oakmont. His childhood friend, Danny Porush became his partner and the company continued to thrive. Stratton Oakmont decided to take the company public starting at $4 a share. Throughout the years, the company took a huge jump and Steve hired Rhonda Brown, who was the former merchandise present of Macy’s East and decided to promote her to chief of operations to Steven Madden. Ltd.Steven Madden had created such a following and a big name for himself that he started to gain celebrity customers. Neve Campbell, Alyssa Milano, Carmen Electra and Sarah Michelle Gellar and even Mary J. Beige. In 1997, the company had generated over $59 million in sales and was operating in 17 stores. During that time, Steven Madden was considerably the most successful shoe designer and when interviewing for Footwear news, Steve compared his company to “an underground rock-and roll band that just got their first number one hit single” (Crisis of the Sole, n.d).
Jordan Belfort, chairman of the company, cheated investors out of $200 million. Around 1997, the government started to accuse Stratton Oakmont management of financial misconduct and his parter and Jordan Belfort actually pleaded guilty and went to jail. “In 2003, a U.S district judge in Brooklyn ordered Belfort to pay $110.4 million in restitution to investors as part of his punishment. Belfort and Daniel Porush, who was the former president at Stratton Oakmont, had to give up about $11 million in properties” (Wyatt, 1999). Steve Madden’s dealing with Jordan Belfort and Danny Porush were later dramatized into a film called The Wolf Of Wall Street made in 2013 which was directed by the great Martin Scorsese.
Steven was indicted on several charges that had to do with civil and criminal in connection with transactions with his firm. Steven Madden plead guilty the following year to securities fraud and money laundering and was sentenced to prison in 2002 and served 31 months. During his sentence, Steven stepped down has chairman of his company and stayed on as a design and creative officer. When he was released in 2005, the company expanded into platform heels and chunky-heeled shoes. As time went on, the company was continuously scrutinized for making budget-priced rip offs of high-fashion creations encompassing Stella McCartney, Alexander McQueen and Balenciaga. Many of the big fashion houses sued from trade infringement and usually settled out of court.
In 2010, Steve Madden decided to buy his friend Betsey Johnson out of debt. She had opened too many store too quickly and ran herself into a hole pretty quick. He came up with a plan that she would pay him back instead of paying another lender. He worked out an agreement with her and her company so that he could take over all the licensing for her handbags, small leather goods, belts and umbrellas. The people working at Johnson’s company weren’t too thrilled to hear this news.”Madden, who went to prison six years ago for stock manipulation, money laundering and security fraud now owns all of them” (Shoe, 2010). Madden’s main focus with the company was expansion and he wanted to see hire shoe sales become 30% more of her total sales within a years time. While Betsey Johnson still handle all of the design aspects, in 2012 Betsey decided to close down all of her 63 retail locations.
Steve Madden continues to exceed in sales and the brand continues to go up at least 15% every year. In 2018, the company hit a all time high with a total revenue of $374 million. The brand continues to open up new locations all of the time and most recently a 2,000 square foot store in Time Square. Steve Madden’s team makes sure there are always new products launched and everything is differentiated from what came out in previous seasons. His team moves extremely fast to create and bring newness to the market. Steve also owns the brand Dolce Vita and has continued to see an exceptional growth. He has a 63% of sales alone that happen from a licensing deal by having his merchandise sold in department stores.
Steve currently works with The Doe Fund, “which is a nonprofit organization that provides paid transitional work, educational opportunities, housing, counseling and career training to people with backgrounds of incarceration, homelessness and substance abuse” (Schipper, 2017). Steve made a commitment after his jail release in 2005 that it was his mission to help former inmates that have been in his same position because he understands the struggle himself of getting back on his feet and starting again. In that same year, Steve Madden made a huge comeback in sales and was awarded Company of the Year from the Footwear News Achievement Awards.
In December of 2017, Steve Madden decided to tell his own story and produced his own documentary called “Maddman: The Steve Madden Story.” His debut in the girl starts off talking about the billion dollar shoe business he has built. He has over 320 retail locations in over 75 countries across the world. The film tells the rise and fall of the celebrity and how his days started off at Jildor and LJ Simone. It takes you through his entire journey from doing drugs in New York City to starting his company with only $100 in the bank. He sold shoes from his garage or out of his trunk on the streets. He knew he has the potential to create something huge. The film also describes the experiences Madden had in prison and the trust he put into his childhood friend, Danny Porush, only ruin his entire life and reputation. The film talks about the business side of the company and how he finally went public with his first store in SoHo, New York. His ambition, success and everything he wish he could over again.
Steve Madden’s core customers are Millennials. It is crucial for marketers to target this generation of consumers. Everyone is always interested in getting a good deal or a sale. Steve Madden offers contests for a free vacation or tickets to a concert which also is a great way for them to collect consumer data. Engagement is very relevant in todays society because a lot of shoppers and influencers share their recent purchases on social media. The company now uses an application called Bluecore which helps them send out mass email campaigns such as price decrease, product abandonment and pre-orders. This genius e-commerce business was used as a tool to help increase revenue with every email. “The Steve Madden team are masters in marketing and communication. Whatever they do is good and everybody talks about it”(Henning, 2012).
Since Steve Madden was founded, it has launched a sub brand called Madden Girl, which targets women between the ages of 15-20. For the more sophisticated, higher-end customer, there is the brand called Steven, which targets ages between 25-40. Steve Madden distributes all of its products through retailers, mass merchants and national chains all across the United States and to different countries such as Europe, Asia, Canada, Mexico, Australia and the Middle East. The company is divided into five segments and operates on wholesale accessories, retail, wholesale footwear, first cost and licensing. The brand has over one hundred styles with women’s and men’s shoes combined. The most popular categories are; sandals, wedges, booties, boots pumps and flats. All of his products are carried in a array of patterns, colors and even the material they are made out of.
Marketing mix is all about how the product that is being marketed. Without a product, the marketing mix would never exist. The product is all about the concept of what you’re selling and that tools that they are composed of. The type of the design of the shoe and the manner in which they are created. Every shoe of Steve Madden is composed of different elements and the end result is to make every shoe have their own identity to stand out. Steve Madden and its notability allow the marketer’s to increase the success of the product. The next step in the marketing mix is determine the price of a product in which you want to market it at. All of the women’s shoes run from the price of $69.95 – $229.95. Steve Madden originally had a price point that was lower and more affordable to the everyday customer. Throughout the years, prices continue to rise to keep up with the competition in the retail world.
The most popular shoe of the moment is now wedges and sandals. With spring and summer right around the corner, women are starting to get ahead of the upcoming season’s trend.
The list price is a standard price that customers won’t see from the added discount. Steven Madden will use certain prices to attract customers who value high quality shoes but don’t feel like they have to drop hundreds of dollars at the same time. Discounts are often used by the company as incentives for the customers to buy more of their products. Discounts during season will consist of a “buy one get one half off.” Steve Madden also has their own retail outlet locations that can sell their product at exponentially discounted prices.
After the price and product is determined, Steve Madden will use the marketing mix to determine the place that their products will be available to customers. The place is determined by the buyer’s and customer’s perspective. Place is defined by the convenience that will be the easiest to attain the product. The place of the product is determine by actions taken throughout the company that are based off of the customers they want to reach out to and where they will be distributing to. The products that Steve Madden launches are strategically placed throughout the market so they can appeal to that type of specific customer and can be conveniently purchased.
The last step of the marketing mix is the promotion of the product that is chosen. A promotion is the way a company will communicate the product with the buyer and customer. Choosing the right promotion for a product is important and will determine whether a product sells or not. Promotion consists of personal selling, advertising, public relations and sales promotion. Marketer’s that help the brand focus on the customer or buyer’s perspective of a product to bring attention to the product. While researching the company, I have found that this company puts a lot of careful though into how their company work’s with their marketing mix and how they make their products available and desired by each and every customer.
Steve Madden has always been known for its trendiness and strong customer brand. According to the source, “The company’s profits are steady with business having earned between $110 and $120 million dollars annually in the last three years. While earnings have been flat, share repurchases have meant that the businesses earnings per share have continued to trend upward” (Pinto, 2018). Steve Madden sells private label clothing and name brand items, its business is less retail-focused that it may appear to be. Sales that were generated from their footwear were at a 66% of net sales last year and were only increasing around 6.3%. The wholesale accessories represented about 16% of all sales. When break down the income statement of Steve Madden, it will show the stock’s decline overtime.
In order for Steve Madden to sustain its growth in the retail industry, I believe it needs to continue to expand their businesses globally. When reviewing the performance level of the company it has been said that, “Steven Madden’s international business reported a 24% improvement in their last quarter and their flagship locations registering 30% more of growth” (Zacks Equity Research, 2018). Last year, the company reported a net income of $32.4 million and 56 cents per share. “Steve Madden continues to make strides in the retail world and has gained 15.1% for 2018 so far and has been up nearly 5% for the period” (Garcia, 2018). “Steve’s vision is to give fashion forward men and women a unique way to express their individuality through style resulted in million of customers worldwide and propelled his designs to the forefront of fashion” (Madden, 2014). It is his mission to create products that are timeless, innovative and sometimes wild but always spot – on – chic.
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