LONG ISLAND CITY, N.Y., Feb. 8 /PRNewswire-FirstCall/ -- Steven Madden,
Ltd. (Nasdaq: SHOO), a leading designer, wholesaler and marketer of fashion
footwear for women, men and children, today announced it has completed the
acquisition of privately held Daniel M. Friedman & Associates, a designer,
manufacturer, and distributor of handbags, belts and related accessories.
The acquisition was completed for $18 million in cash and includes certain
earn out provisions that are based on financial performance through 2010. The
transaction is expected to be immediately accretive, contributing
approximately $0.15 - $0.18 in earnings per diluted share within the first
full year of ownership excluding amortization of intangibles associated with
the acquisition, the amount of which is still being determined.
This strategic acquisition will enable the Company to further augment and
complement its core footwear category and continue to expand its reach into
the branded lifestyle concept. Moreover, the Company believes the acquisition
will provide additional design and management talent and will further bolster
Steven Madden, Ltd.'s already strong operating team.
"Not only is the accessories category highly complementary to our footwear
business, but this acquisition ties in perfectly with our strategy of
developing Steven Madden, Ltd. into a global lifestyle brand," commented
Jamieson Karson, Chairman and Chief Executive Officer of Steven Madden, Ltd.
"This transaction affords us more control over our accessories business as
Steve will be intimately involved in the creative process as we develop our
handbags and other categories to their fullest potential. Direct ownership of
this strong and proven business represents a very effective use of our cash
that we expect will provide significant return to our shareholders."
Steven Madden, Ltd. signed a licensing agreement with Daniel M. Friedman &
Associates for handbags and related accessories in July 2005. Under this
previous licensing agreement between the two companies, certain Steven Madden,
Ltd. retail stores are currently receiving shipments of Steve Madden
accessories from Daniel M. Friedman & Associates, and product is planned to
launch in wholesale accounts in March 2006.
Founded in 1995, Daniel M. Friedman & Associates is a leading manufacturer
and distributor of brand name fashion handbags and accessories and offers a
proven and successful business model. In addition to the current Steve Madden
license, the Company holds accessory licenses for Betsey Johnson, Ellen Tracy,
and others. The Company is also well known for its private label offerings as
well as its own fashion belt line under the Fina Firenze brand. The Company
most recently achieved an approximate $41 million in net sales (unaudited) for
Effectively immediately, Daniel M. Friedman & Associates will become a
wholly-owned subsidiary of Steven Madden, Ltd., maintaining its existing
business model and current licenses while developing Steve Madden handbags and
belts. Daniel M. Friedman & Associates will retain its current operations and
location in New York City.
"We have had a long standing relationship with Steven Madden, Ltd. and are
excited to start working together in this new capacity," commented Daniel M.
Friedman. "With our shared vision of developing creative and trend right
products, we feel that this was a logical step in our relationship and we are
honored to formally partner with one of the leading fashion forward companies
in the marketplace. I am extremely confident that our business will continue
to thrive under the leadership of Steve Madden, Ltd."
Mr. Karson concluded, "We are excited about this opportunity to build on
the momentum of last year and bring together two well-seasoned, highly
talented management and design teams. Led by Steve, the newly combined design
group will develop fresh and fashion right product across multiple categories
under the Steven Madden, Ltd. brand. We welcome Daniel Friedman and his team
and look forward to a successful future together."
Steven Madden, Ltd. designs and markets fashion-forward footwear for
women, men and children. The shoes are sold through company-owned retail
stores, department stores, apparel and footwear specialty stores, and on-line
at http://www.stevemadden.com. The Company has several licenses for the Steve
Madden brand, including handbags, eyewear, hosiery, and belts, and owns and
operates 99 retail stores, including its online store. The Company is also the
licensee for l.e.i. Footwear, Candie's Footwear and UNIONBAY Men's Footwear.
Statements in this press release that are not statements of historical or
current fact constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause the actual results of the Company to be materially
different from the historical results or from any future results expressed or
implied by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties readers are urged to consider
statements labeled with the terms "believes", "belief", "expects", "intends",
"anticipates" or "plans" to be uncertain and forward-looking. The forward
looking statements contained herein are also subject generally to other risks
and uncertainties that are described from time to time in the Company's
reports and registration statements filed with the Securities and Exchange
SOURCE Steven Madden, Ltd.