Steven Madden, Ltd. Acquires a Market Leading Accessories Business, Daniel M. Friedman & Associates
February 08 2006 - 7:30AM
PR Newswire (US)
~ Company Acquires Its Accessories Licensee to Further Strengthen
and Expand Accessories Platform ~ 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 fiscal 2005. 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
Commission. DATASOURCE: Steven Madden, Ltd. CONTACT: Ed Rosenfeld,
Vice President, Strategic Planning and Finance of Steven Madden,
Ltd., +1-718-446-1800; Investor Relations: Cara O'Brien or Lauren
Puffer, or Press: Melissa Merrill, all of Financial Dynamics,
+1-212-850-5600 Web site: http://www.stevemadden.com/
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