It’s been five years since Steve Madden walked out of a Florida penitentiary. He’s no longer as buff as when he was released. Nor does he describe prison life as colorfully — and as frequently — as he did soon after being freed.
Much has changed.
The hard-charging founder of Steven Madden Ltd., by his own account, is very content. And that’s with good reason.
The company Madden began bankrolling 20 years ago with just $1,100 in personal savings is thriving, hitting $500 million in sales last year, and his personal life is on equally sound footing.
Madden is now married, with two children who regularly take private yoga lessons. At home on a Friday morning in late January, he is dressed in an untucked white T-shirt, jeans and bare feet, with no baseball cap — a Madden hallmark — in sight. Music from Corinne Bailey Rae plays softly in the background, as traces of incense scent the living room of his multistory Manhattan brownstone. The place, with neatly stacked books along the perimeter of the first-floor, has the clear markings of a softer, feminine touch.
It’s a stark contrast for Madden, a fidgety, street-smart New Yorker known throughout the industry for his charisma, calculating business moves, blunt talk — and, of course, for being convicted in 2002 of securities fraud and money laundering, which sent him to federal prison in Florida for 30 months, followed by a stint in a Bronx halfway house.
The executive is visibly comfortable in his home, even at ease. But that classic, raw Madden is never far away.
“I like to fucking curse,” he says to start the conversation. “It’s real, it’s how I talk, and it’s how we grew up talking.”
For the iconic front-man, who often says what’s on his mind, such unscripted talk engenders fierce loyalty among company employees — his first hire, David Cristobal, for example, still works for the firm as a warehouse manager — and among retailers, who Madden makes a point of glad-handing and schmoozing at every opportunity.
The 52-year-old boss is as popular with retailers as consumers. And he’s built a business on knowing what both want.
“The No. 1 goal in our company is to make cool products,” Madden says, “to make products girls and guys want to buy.”
Here, in a candid wide-ranging interview — covering product to profit and prison to parenting — Madden talks about the rise of his company and what it takes to become an American entrepreneur.
FN: What do you think is the biggest misperception about your company?
SM: I’ll tell you what it is: We design shoes every day, and we are as creative as Prada. We are creating as much as the Pradas and the Chloés of the world. Do we make $900 shoes that are in Neiman Marcus? Have we made shoes just like that, which are less than $100 and have been great? Yes, we have. We’re out there creating and designing every day, making and building a meal for our customers. That creativity is not appreciated, and I would argue that what we do is harder. I could design an $800 shoe line; it’s easy. You use the best materials and you can make beautiful shoes. It’s easier than making great shoes for $90.
FN: Do you want to set the record straight on how people should view you?
SM: I don’t want to give a bullshit answer that’s self-serving. I’m a very competitive guy, but I’m as insecure as the next guy, and I worry that it will all come to an end. But I take it all very seriously: the responsibility of having a business, of taking care of the employees and their health care. The wheel is big. We help a lot of people, we employ a lot of people, and I take that responsibility seriously. Not in the profit-and-loss way, but for employees and those who are helping their relatives. There are a lot of people who get support from a thriving business.
FN: What factor has defined the company’s success over the last 20 years?
SM: We stayed true to what we believe. I took some of the best things from the guys that were around in the 1970s — the really creative shoemakers, like Natural Comfort and Goody Two Shoes — and made sure product stood before anything else. The No. 1 goal in our company is to make cool products, to make products girls and guys want to buy. We throw everything at that. Profit is No. 2. It’s the second goal of our company.
FN: What are some of your other goals?
SM: Obviously, I want to keep growing the company. And we are growing; every year we grow. This year will be a record year. We will do close to $700 million. Growing is an important part of the business, but more important than that is to get better. I want us to get more efficient, to get faster. I just want to get better. If it didn’t grow but just got better, I’d be happy with that.
FN: Do you want to be a $1 billion firm?
SM: The number is not important. What’s important is being the best at what we do. I don’t know what that number looks like. Bigger is definitely not better.
FN: You’d have to admit, though, Steven Madden Ltd. looks a lot different than in the early days. How did it all begin?
SM: I started in the shoe business when I was 16, in 1974. I was a stock boy in a shoe store called Toulouse. It was owned by this guy Lance, who later went on to be one of the founders of L.J. Simone, which was a big line in the 1980s. It was a great time then, with a lot of interesting kinds of shoes. Men’s platforms were very popular. They couldn’t keep me off the selling floor, even though I was a stock boy. Eventually I worked at Jildor Shoes, in Cedarhurst, N.Y., on Long Island. I really learned the shoe business there. After that, I went to work for L.J. Simone as a salesman. One day, I started to play around in the factory and started developing shoes, and I thought I could sell them. I had a knack for knowing what the market needed. I left there after eight years, and in 1990, started Steven Madden.
FN: Who was your first hire?
SM: I had a driver, who was the doorman in my building where I lived in Greenwich Village. He would drive me to work. I didn’t have a license because I’d lost it for DWIs.
FN: What was your first account?
SM: My first account, in 1990, was Marty’s Shoes, which is out of business today.
FN: When did the department stores start to pick you up?
SM: Nordstrom was right away. In those days, people gave you a chance. I suppose they still do, to some degree, but you have to have really creative stuff.
FN: What’s been your biggest high in the last 20 years?
SM: I’ve had a lot of highs along the way. And it hasn’t been so much a dollar goal. I keep getting highs. It keeps getting better, it really does. But the biggest high was coming back from prison and to work for the company. The excitement, the great people I missed and really trying to take the business to another level and then seeing it go to another level, that was an exciting high. It’s definitely a different company since I’ve been back, in terms of pre-prison and post-prison. The company is so much better in so many ways.
FN: How so?
SM: There’s more professionalism in the company, there’s more intellect, there’s more passion than ever. Although, certainly, there were very passionate days pre-prison. Now there’s just more intellect.
FN: Was your low point going to prison?
SM: I suppose, although I did go with a sense that there were great people taking care of the business for me. Personally, it was bad, but I felt like the business was OK.
FN: Do you look back at that time with any regrets?
SM: No. I wouldn’t change a thing — not even going to prison. Everything I’ve done has led me to where I am now. It sounds a little ethereal, but I do believe every move — the bad ones, the good ones — have led me to the place where I’m at now, which is a really good place, with a great company and a great family. I’m happy, personally and business-wise.
FN: Has being a dad changed you?
SM: It’s motivated me to keep growing my business. It’s been an interesting motivation. I think to myself, “Why am I doing this?” I have some new motivation now, for the kids. I want to leave them something, to build them something.
FN: Do you envision them joining the company one day or doing something else?
SM: Well, it’s going to be different. They’ll have money, probably. They may not have any, but I think they will. I hope they’re educated and they’re smart. My wish, whatever they do, is that they do what they like, irrespective of how much money they make. That won’t be that important because they’ll have money. So it might be more important that they do something they love. I wish that for them.
FN: You once said people don’t want to work hard anymore. Is that still true?
SM: That’s one of the things that has really bothered me. The boom economy was so robust in the last 20 years that there was no need to sacrifice. People lost sight that work should come first. You have to feed your family. That’s something I learned from my parents. I believe in that so much because I’ve seen it unravel for folks. Your work is feeding your family, educating your family. Not that the work is the only thing that matters in life, but I’m saying, first things first. I learned many good things from my parents — and some bad things, some things that were not so great.
FN: How did your family and upbringing affect your career?
SM: Perhaps we weren’t really a touchy, feely family, so maybe I have problems with that in my life today. I believe it’s great to be able to do stuff, but your work comes first. People who don’t believe that end up borrowing money from me anyway.
FN: What’s the biggest challenge facing retail today?
SM: Retail is very tough. But I’d say finding the right young people to work in the stores is the biggest problem. Nobody wants to be a stock boy and learn. They’re not taking those basic steps today. Hopefully, that’s the good thing about this terrible recession, that Americans will get humble again. I don’t see kids wanting to come in; they see footwear as a dead-end job. Maybe we need to do a better job of showing that upside.
FN: What areas of the company do you need to improve on?
SM: Everywhere. You need to get better at every area: quality, speed to market, design.
FN: Is there a specific weak spot?
SM: Yeah. We have some really great entrepreneurs — that’s no bullshit, I mean really great. But I’d like to see the company talk to each other more. They tend to not work with the other kids in the sandbox, and that bothers me. I’d like to see more of a spirit of collaboration. We tend to always work in silos. Maybe that’s too utopian.
FN: One area the company has struggled with is the athletic space. You launched Fix, which didn’t pan out. Are you still aiming for that category?
SM: Yes, Fix was not good. We’d like to be in the sneaker industry. It’s hard because our customers wear Converse. You have to say to yourself, “Can I do it better than Converse?” or “Can I make a better shoe? Can I do it better than Nike?” I don’t know if I can, so we’ve made some sneakers that were sold in our stores that have been unbelievable. But until I can do that better, I don’t know.
FN: What’s your take on acquisitions?
SM: We definitely believe in acquisitions. We like to buy. We’ve bought a couple of companies in recent years, and [we’ve just bought] another handbag company. We have a lot of cash and a valuable stock. It’s something that’s definitely in our future. Content is very important to me, whether it’s bags, belts or shoes.
FN: Would you ever sell your company?
SM: Well, I’m a businessman and I’m a creator — a shoe creator. It would depend on the deal. It’s not something I want to do. My preference would be to buy, not sell.
FN: There’s been a lot of consolidation. Are you worried about that?
SM: Those are natural acts. That would be like complaining about earthquakes. There’s just nothing you can do about it. There’s a natural order of things. There are always going to be consolidations, and then maybe an era where it goes the other way, where pieces get sold off. I don’t fret much about the natural life spans of shoe companies. If stores don’t do the right things, they cease to exist, and that doesn’t trouble me at all.
FN: How aggressive do you want to be in other categories?
SM: We have a big accessories business today. We bought handbag and belt designer Daniel M. Friedman a couple of years ago. And then we bought Zone 88, another handbag firm. We’re interested in the accessory space: bags, belts, cold-weather accessories. We think they’re related, so there will be acquisitions in those areas.
FN: You’ve signed a number of celebrity partnerships in the last 24 months. How do you like working with the Olsen twins?
SM: The Olsens are unbelievable — they’re devoted to fashion. They work hard. They’re not at all what people think they would be like. They’re not little socialites. They’re hard-working, talented women, and whatever success they’ve gotten, they’ve earned it.
FN: What will Steve Madden look like in 2020?
SM: Steve Madden is hopefully walking around with a baseball hat on, still making hot shoes with a lot of young people around him.