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Retailer's Legal Woes Could Prove a Boon to Super-Tight Manhattan Marketplace

NEW YORK CITY-Steve Madden, on of the fashion industry's hottest shoe designers, may see the company named for him go on the block in the wake of significant stock depreciations following charges filed against him.

By Amy Vaughn | Updated on October 05, 2000

NEW YORK CITY-Avid shoe-shoppers across the country are suffering pangs of anxiety as one of the fashion industry’s top footwear designers may no longer own the company that bears his name. Steve Madden Ltd. may be put up for sale as the company’s stock values continue to depreciate as a result of a lack of confidence in the company while its namesake faces mounting a defense in three cases. While the New York-based company has not been accused, it has even gone so far as to hire Bear Stearns to help advise it on its options.

While Bear Stearns coming on board as financial adviser picked up the stock rate to $8.75 before the Nasdaq closed for the day, this is down $13.90 since prior to the legal difficulties faced by Madden were announced this spring. It was in June that the Manhattan US Attorney’s office charged Madden with securities fraud and money laundering for allegedly helping two brokerage firms rig stock prices. Madden allegedly helped to manipulate the prices of 31 initial public offerings, one of them for his own company. Shareholders also filed a suit in Brooklyn against Madden and the Securities and Exchange Commission also filed a suit.

With the first trial not scheduled until April of next year, there is plenty of speculation already brewing about the extensive collection of retail properties leased by the defendant’s company should they sell. Madden has reportedly lost $33 million as his 21% of the stock in the company suffers the downturn in value. The company’s revenue last year was $163.04 million and now could fetch about $96 million.

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