After Steven Madden Ltd.’s fourth-quarter net sales were boosted by its new businesses, CEO Edward Rosenfeld said the firm is on the hunt for a new brand to distribute exclusively to a large-network retailer.
Speaking to analysts on a call Tuesday, Rosenfeld said, “We’re very excited about what’s going on at JCPenney and the changes they’re making there. We’d love to have an additional brand for them. Our business there is primarily Olsenboye. We do the shoes and the bags for that brand, which is exclusive to JCPenney, and the thing we’re most interested in right now is [that] Olsenboye will be selected as one of the shops in the new plan there.”
Oliver Chen, analyst at Citi Investment Research, predicted Madden would look for “something with a unique positioning that is non-cannibalistic [to its existing brands] and offers a proprietary name to a mass market.”
Trend-right product and new businesses continue to buoy Madden’s rate of growth, and analysts said the newer brands in the portfolio continue to represent some of the firm’s biggest growth potential in 2012.
Fourth-quarter net sales increased 73.7 percent year-over-year, including sales from Topline and Cejon. Excluding the two, sales growth was 19.1 percent.
“There’s enough change in the fashion trends this year that will support growth within the domestic segment. That comes down to more ornamentation and more studding — all the things that are driving the price per pair higher,” said Camilo Lyon, analyst at Canaccord Genuity. “The second driver is the growth of these emerging brands. Betsey Johnson is still a very nascent business for them.”
Chen agreed, saying, “The new brands they’ve been adding to their portfolio should help them to continue taking market share. They’re well-positioned in a tough economy given that they have expertise and core competency in trend recognition at a compelling price point.”
Rosenfeld added that a top priority for the firm in 2012 will be to expand the e-commerce business, as sales on Stevenmadden.com were up 27 percent in 2011, with growth accelerating in the back half.
The firm also will ramp up the expansion of its retail network.
“You’re going to see us start to be a little more aggressive in terms of full-price stores. The last few years, we’ve been opening two, three, four a year, but this year, we’ve guided to seven to eight full-price stores, in addition to the five to six outlets. You’ll see us do at least that many over the next couple of years,” said Rosenfeld, noting that Madden has identified about 20 additional locations in Canada for Steve Madden stores.
For the quarter ended Dec. 31, the Long Island City, N.Y.-based firm scored a 34.9 percent increase in net income to $23.8 million, or 55 cents a share, compared with $17.6 million, or 41 cents, in the same period a year ago. Net sales soared 73.7 percent to $279.8 million.
For the full year, net income jumped 28.5 percent to $97.3 million, or $2.25 a share, on the back of 52 percent growth in revenue to $968.5 million.
For fiscal 2012, earnings per share are expected to be in the range of $2.60 to $2.70, while net sales are expected to grow between 21 percent and 23 percent.
Madden ended the year with cash and cash equivalents totaling $102.8 million.