On a Friday afternoon in February, New York City was giving footwear retailers the kind of frigid winter temperatures they had been craving. But in the Schwartz & Benjamin Inc. showroom on 57th Street, industry veterans Steve Madden and Danny Schwartz weren’t talking seasonal boot sales.
Instead, the pair discussed an NBA game from the night before and exchanged predictions for the rest of the season. It was just a few days after the proverbial stars aligned for Madden, who finally succeeded in snapping up Schwartz & Benjamin, the firm co-founded by Danny Schwartz’s grandfather 94 years ago.
For several years, Madden’s company has been aggressively pursuing the family-owned company that specializes in licensed brands and private-label footwear.
“Schwartz & Benjamin is one of the finest companies in the shoe business; they’ve always made great shoes — it’s just that simple,” Madden said of the firm, which produces footwear for Kate Spade, Rebecca Minkoff, Alice + Olivia and Avec Les Filles. “I’ve been approaching Danny for five years, but he rebuffed me every time.”
Eight months ago, when he ran into Schwartz’s wife, Barbara, at a restaurant on Madison Avenue, Madden took one more shot at forging a partnership. (Barbara Schwartz is chief creative officer at Schwartz & Benjamin.)
“This time we were ready,” Danny Schwartz said, as he reflected on how much the fashion climate has changed. “My partners — companies like Kate Spade and Banana Republic — are all multinational, billion-dollar [players]. My competitors are companies like Caleres, Global Brands and Vince Camuto, [which are also] humongous. My clients — Lord & Taylor, Saks, Hudson’s Bay, Neiman Marcus, Nordstrom — they, too, are billion-dollar companies.”
While his small, family-owned firm’s revenues sat at an impressive $88 million in 2016, Schwartz knew that it was time for change. “To survive and thrive in this world today,” he said, “we needed to get bigger.”
According to Canaccord Genuity Inc. analyst Camilo Lyon, if Steve Madden’s track record for energizing companies is any indication, Schwartz & Benjamin is equipped to do just that. “We’ve learned that Madden is very good at integrating businesses. This company knows when to interject and when to step back and let a business run itself,” Lyon explained.
Lyon said proof of Madden’s brand-boosting prowess could be seen in the success of Dolce Vita, which Madden snapped up in August 2014.
Still, the decision to place his family’s business into the hands of a publicly traded firm didn’t come without some jitters for Schwartz.
“It took me some time to wrap my arms around selling a company that’s now in its fourth generation of being family owned,” Schwartz said. “But now, I’m not nervous at all. I’m excited because Madden is going to help us grow our existing brands, and they’ll also give us some new stuff.”
One gain for Schwartz — whose company will continue to operate as a standalone business with its current management team and employees — is Madden’s plans to have the firm produce shoes for Brian Atwood, which he also acquired in 2014.