The most beloved stores of the early aughts have seen better days. Brands like American Apparel, Abercrombie & Fitch, Aeropostale, J.Crew, BCBG, and Wet Seal are suffering through store closures, bankruptcies, acquisitions, and utterly bored customers — the makings of a retail apocalypse.
But not everyone’s falling victim. Amid the pile-up of struggling or failing companies, one company appears to be doing just fine: Steve Madden. The trendy, reliable footwear favorite launched in 1990 and enjoyed a particularly successful run throughout that decade and the next, in spite of its founder’s stint in jail. And as its contemporaries struggle with declining foot traffic, fast fashion, and the beast that is Amazon, the shoe brand is still riding high.
Steve Madden’s most recent earnings revealed that the company’s sales are up 15 percent year over year — hitting $374 million — and it expects its 2017 annual revenue to jump some 11 percent (in 2016, the company earned $1.4 billion). It’s a far cry from everything else that’s going on in retail right now. To top it all off, Steve Madden just opened a giant 2,000-square-foot store in Times Square, an extremely costly endeavor at a time when most clothing brands are closing their stores at a record pace.
How is it managing to beat the odds? While Madden himself tells Racked “it must be the founder and his ever enduring insecurity” and “global warming,” GlobalData Retail managing director Neil Saunders believes it’s the company’s unsurpassed ability to consistently remain trendy.
“The group puts in significant effort to ensure that its new product launches are both differentiated from what came before and that they are addressing the latest trends and consumer needs,” says Saunders. “Steve Madden has been better than most at anticipating and taking advantage of trends.”
It’s fast fashion — fast fashion that was seriously ahead of its time.
“Steve and his team move fast and furiously to create and bring newness to the market,” says Kristin Frossmo, Nordstrom’s executive vice president and general merchandise manager of its shoe division. “They understand who their customer is and respond quickly when they see them responding to something new. They are great at both anticipating and reacting with incredible speed.”
Other mall brands that rose to prominence during those same 20 years weren’t nearly as trend-based, which is why they constantly lose shoppers to brands like Zara and H&M. Meanwhile, “when it comes to on-trend shoe designs, they are a brand favorite,” says Jharonne Martis, a retail analyst with Thomson Reuters.
The icing on the cake for Steve Madden, which also owns brands like Dolce Vita, is that it’s been enjoying exceptional growth at wholesale channels like department stores. The company sees 63 percent of its sales happen there, which is pretty surprising considering the state of department store shopping is dismal at best — to the point where companies are pulling their products in order to escape the depressing shopping environment. Martis attributes this to Steve Madden occupying a rare and sweet spot: Because of the name recognition that comes with its age, the company is able to charge higher prices than ASOS or Boohoo. Its shoes aren’t low-priced enough to feel cheap, but rather accessible.
“In this retail environment, it’s all about the pricing/fashion combination. That’s where Steve Madden crushes the competition,” adds Martis.
The fact that its shoes are flying off department store shelves at full price while shoppers are essentially trained to wait for deep discounts speaks to current state of the American shopper as much as the strength of the Steve Madden brand. Give the people consistently trendy items done well, and they will pay an above-average price.