Steve Madden Announces Restructuring Agreement with Betsey Johnson LLC
October 08 2010 - 8:00AM
Business Wire
Steve Madden (Nasdaq: SHOO) (the “Company”), a leading designer
and marketer of fashion footwear and accessories, today announced
that it has entered into a Restructuring Agreement with Betsey
Johnson LLC (“BJ LLC”) to effect an out-of-court restructuring of
the outstanding debt of BJ LLC purchased by the Company in August
2010 for $27.6 million. Pursuant to the Restructuring Agreement, in
consideration of the elimination of amounts owed under the
outstanding debt, the Company acquired (i) the trademarks and
intellectual property of BJ LLC, including Betsey Johnson® and
other related brand names and (ii) a 10% equity interest in BJ LLC.
The Company also made a new secured term loan to BJ LLC in the
principal amount of $3 million, which bears interest at the rate of
8% per annum (payable at maturity) and matures on December 31,
2015. In addition, Castanea Partners, who has partnered with Betsey
Johnson and BJ LLC for the past three years, has agreed to support
BJ LLC’s business with a further equity investment in BJ LLC.
The Company and BJ LLC also entered into two new license
agreements under which the Company has granted BJ LLC the exclusive
license to (i) operate Betsey Johnson retail stores in the United
States, Canada and London, England and (ii) manufacture and sell
specified women’s apparel under the Betsey Johnson® and Betsey
Johnson CollectionTM brand names.
The transaction is expected to be accretive to the Company’s
earnings, contributing approximately $0.10 in diluted EPS in
2011.
Other details of the transaction are included in the Company’s
Current Report on Form 8-K filed with the Securities and Exchange
Commission today.
Edward Rosenfeld, Chairman and Chief Executive Officer,
commented, “We are thrilled to add the Betsey Johnson brand to our
growing portfolio of brands at Steve Madden. Betsey Johnson is an
iconic brand with a rabid consumer following, and we believe it
offers meaningful growth opportunity for our business. We are also
pleased to have entered into a relationship with Betsey Johnson LLC
in support of the continuation and growth of its apparel and retail
businesses and look forward to working closely with Castanea in
support of Betsey Johnson LLC going forward.”
Steve Madden, Founder and Creative and Design Chief, added,
“Betsey is my hero – one of the great American designers. I have
always admired how everything she does is instantly recognizable –
it looks, feels, radiates Betsey. We want to do whatever we can to
continue her creative vision and make the Betsey Johnson brand
bigger and better than ever.”
About Steve Madden
Steve Madden designs, sources and markets fashion-forward
footwear and accessories for women, men and children. In addition
to marketing products under its owned brands including Steve
Madden, Steven by Steve Madden, Madden Girl and Big Buddha, the
Company is the licensee of various brands, including Olsenboye for
footwear, handbags and belts, Elizabeth and James and l.e.i. for
footwear and Daisy Fuentes for handbags. The Company also designs
and sources products under private label brand names for various
retailers. The Company’s wholesale distribution includes department
stores, specialty stores, luxury retailers, national chains and
mass merchants. The Company also operates 83 retail stores
(including the Company’s online store). The Company licenses
certain of its brands to third parties for the marketing and sale
of certain products, including for ready-to-wear, outerwear, cold
weather accessories, eyewear, hosiery, jewelry and bedding and bath
products.
Safe Harbor
This press release and oral statements made from time to time by
representatives of the Company contain certain “forward-looking
statements” as that term is defined in the federal securities laws.
The events described in forward-looking statements may not occur.
Generally these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of the
Company's plans or strategies, projected or anticipated benefits
from acquisitions to be made by the Company, or projections
involving anticipated revenues, earnings or other aspects of the
Company's operating results. The words "may," "will," "expect,"
"believe," "anticipate," "project," "plan," "intend," "estimate,"
and "continue," and their opposites and similar expressions are
intended to identify forward looking statements. The Company
cautions you that these statements concern current expectations
about the Company’s future results and condition and are not
guarantees of future performance or events and are subject to a
number of uncertainties, risks and other influences, many of which
are beyond the Company's control, that may influence the accuracy
of the forward-looking statements and the projections upon which
the forward-looking statements are based. Factors that may affect
the Company's results include, but are not limited to, the risks
and uncertainties discussed in the Company's Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K filed with the Securities and Exchange Commission. Any one or
more of these uncertainties, risks and other influences could
materially affect the Company's results of operations and condition
and whether forward looking statements made by the Company
ultimately prove to be accurate and, as such, the Company's actual
results, performance and achievements could differ materially from
those expressed or implied in these forward looking statements. The
Company undertakes no obligation to publicly update or revise any
forward looking statements, whether as a result of new information,
future events or otherwise.
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