After 25 years, shoe business still the perfect fit for Steve Madden

Steve Madden, the man behind the fashion footwear and lifestyle brand, built a billion-dollar empire by designing chunky-heeled boots and platform shoes for teenage girls and women.

Over the past 25 years the Long Island native grew a tiny Queens shoe business into a world-famous designer and marketer of trendy footwear and accessories for women, men and children. The Long Island City-based company bearing Madden's name has recently shifted its focus to integrate its brick and mortar locations with online sales, and to expand internationally.

"I can't believe we have lasted this long," said Madden, 57, of Manhattan, whose company was incorporated in August 1990. "Usually companies don't have a shelf life of 25 years . . . We take great pains to make products that people want, and I suppose that's why we are still here," said Madden, who along the way weathered a securities fraud conviction that landed him in prison for 31 months.

The company owns and licenses 17 brands including Steve Madden, Steven by Steve Madden, Madden Girl, Betsey Johnson and Wild Pair. It markets its products in 45 countries, but currently only about 10 percent of its business is outside the United States. It hopes to increase that by 30 percent this year by targeting the emerging middle class in China and India and other developing countries.

Madden's now famous breakout design was the Mary Lou, a big-toed Mary Jane-style patent-leather shoe popular with teens when it debuted in 1992. Now there are low-wedge boots, ballet flats and stiletto heels ranging from $60 to $200.

"We just want to get better at what we do," Madden said. "We want to make better quality shoes. We want to be faster to market . . . The world has changed so much."

The company had sales of $1.33 billion last year, about 80 percent from shoes and the rest from accessories such as handbags, belts and sunglasses.

The period of 2008 to 2013 "was one of remarkable growth for the company," Steve Madden CEO Edward R. Rosenfeld said. "We tripled the sales over that period, and we quadrupled the earnings."

The footwear giant's operation consists of retail stores and e-commerce websites, as well as wholesale distribution for department stores, specialty stores and catalog retailers. The company operates 136 retail stores, including three on Long Island, and employs about 3,000 people worldwide.

"We are always on to the next idea and looking for the next big shoe, and that's something that Steve has really instilled in the company culture," Rosenfeld said.

Start as a shoe salesman

The shoe titan, who was raised in the Five Towns, is the youngest of three boys. His Irish-Catholic father was in the textile business, and his Jewish mother was a homemaker. After graduating from Lawrence High School in 1975, Madden attended the University of Miami, but he said he got involved with drugs and alcohol and returned home in 1976 after his father refused to continue paying his tuition.

He worked at a number of shoe stores before starting his own, including Toulouse during high school and Jildor Shoes' first location in Cedarhurst. Rather than finish college, Madden took a sales job at Jildor, which has been in business for more than 66 years and now has four locations on Long Island.

"I wouldn't be here right now if it wasn't for the Five Towns or if it wasn't for working in Jildor. . . I really learned on the floor of a store what women want," said Madden, a father of three. He recently divorced his wife, Wendy Ballew, whom he met shortly before she started work at the company in 1991.

His former boss, Jan Friedman, who still works as a buyer for Jildor, said he has been buying Madden's shoes since he went into business. "Steve was a natural-born salesman," Friedman said.

With only $1,100, Madden designed a Western clog called the Marilyn and sold samples from the trunk of his car. He opened his first boutique in Soho in 1993. Within two years he had sales of $38.7 million and celebrity customers such as model Carmen Electra, actress Sarah Michelle Gellar and singer Mary J. Blige. By 2000 the company hit $205 million in sales and opened its 50th store.

"I wake up every day and try to make the best shoes that I can," said Madden, who is bald and normally wears a baseball cap, casual shirt and jeans.

Karen Giberson, president of the Manhattan-based Accessories Council, a trade group, first met Madden when he was launching his company 25 years ago. She was a footwear buyer for QVC, and Madden invited her to see his shoes at a trade show in Las Vegas. "That was the first time I met Steve or bought his products," Giberson said. "Now he is a mega force. He found a way to stay relevant."

"If Steve has an idea for a shoe in the morning, he can literally get a shoe sample made up that day and put it on a model foot, and we will have a prototype essentially in 24 hours," Rosenfeld said. Product designs are done in Long Island City but manufactured around the world, including in Mexico, Italy and Asia.

Madden has succeeded despite a reputation among some in the industry as a creator of knockoffs.

What has kept the company going for a quarter of a century is the shoe mogul's charisma, said Nassau Community College fashion professor Joseph J. Pescatore.

"It was all about his personality," Pescatore said. "He can sell you anything. That is how he got where he is. Of course, the fashion was right-on, but it takes more than great design to launch a company and keep it going for 25 years."

Rebounding from his mistakes

In June 2000, Madden was indicted on charges of helping to defraud investors in connection with the Lake Success-based brokerage firm Stratton Oakmont's "pump and dump" stock scheme, masterminded by former stockbroker Jordan Belfort. Madden's childhood friend Daniel Porush co-founded Stratton; the firm gave Madden shares in initial public offerings that he then traded illegally.

Before heading to prison in September 2002, Madden resigned as chief executive of his company. He served 31 months of a 41-month sentence after pleading guilty to conspiracy to commit money laundering and securities fraud. Madden also forked over several million dollars in restitution. His role was documented in "The Wolf of Wall Street," a Martin Scorsese movie about Stratton Oakmont.

"I made mistakes when I was younger in trying to raise money for the company as evident in that movie . . . and paid the price as I should have," Madden said. "I learned from it, and hopefully because of that I am a better man, a better father and a better businessman."

Claudia Cafarelli, an adjunct assistant professor in Hofstra University's department of marketing and international business, said she found that many designers go into business because of their creative talents, but they are not always business savvy, which can get them into trouble.

"These are creative people. They are not business people," said Cafarelli, who teaches a global fashion marketing class. "I tell my students they have to learn business, not just fashion. Learn how to source the fabrics, staff, production, currencies and political and trade nuances."

Staying involved

After his release from prison in April 2005, Madden returned to work at the company he founded, this time as creative and design chief, having ceded the chief executive title. He was barred for seven years from serving as an officer or director at any public company after his conviction.

"For our investor base, Steve's involvement is only a good thing," said Rosenfeld, who has been with the company since 2005 and became CEO in 2008. "Steve is truly a unique talent . . . The only thing that I would have a problem with is if Steve weren't associated with the company. That would be a challenging thing to explain to investors."