New Businesses Drive Growth for Madden

NEW YORK — Steven Madden Ltd. is firing on all cylinders.

The company’s core brands continue to deliver in an increasingly challenging environment, said analysts, while new businesses are providing increased opportunity for co-branding and licenses.

Superga, debuting under Madden this spring, is off to a good start, said CEO Edward Rosenfeld on a call with analysts last week. “Superga’s core brand is a $65 canvas sneaker, [but] we’re going to do more expensive shoes called The Row for Superga … and those have already been bought for spring by Barneys, Neiman [Marcus] and Bergdorf [Goodman]. We’re really excited about that new license,” he said.

Oliver Chen, analyst at Citi Investment Research, said, “[Madden is] executing on great trends with quality product and a trusted brand, and some of the magic of the model is the attractive price points. [They are] in a good place for holiday [because] accessories and footwear are doing better than apparel [in this economy].”

Looking to 2012, Sterne Agee analyst Sam Poser said, “There are numerous opportunities within the company’s core lines, as well as the recent acquisitions, that may drive revenues that are unforeseen at this time.”

In the third quarter, The Topline Corp’s portfolio of brands contributed more than $13 million to net sales, while Cejon contributed $32.6 million. Rosenfeld said Topline has the potential to become a $200 million business, while Cejon could contribute roughly $70 million and Superga about $15 million.

Net income in the quarter rose 39 percent to $31.9 million, or 74 cents a share, on a sales increase of 71 percent. Madden ended the quarter with $35.1 million in cash and no debt.

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