Back on His Feet AgainHow a stretch in prison made shoe designer Steve Madden into a better man—and a better manager.
By Ramin Setoodeh – Newsweek – July 16, 2007
Steve Madden is showing off his spring collection: gumball-colored sneakers with wedges that look like souvenirs from an acid trip. Fix, they’re called, appropriately enough. “Fix?!” groans a Brooklyn shoe-store owner, whom Madden has invited to this New York trade show to critique his line. “Girls will look at them and say, ‘What’s wrong with me? What do I need fixed?’ ” Madden gives a quiet nod of his baseball-capped head. One of his employees fidgets nervously. But the store owner doesn’t let up. “It’s old. It’s done. You need to define yourself in the marketplace.”
After a three-year hiatus, of sorts, Madden, 50, is doing just that—and he’s not letting himself be rattled by critics. In the mid-’90s, Madden was a rock star to millions of young women who couldn’t get enough of his affordable bejeweled platforms and big-toed clogs. The college dropout who’d gotten his start peddling shoes on Long Island was Manhattan royalty, holding court in his SoHo flagship and sitting courtside at Knicks games. Then, in 2001, Madden pleaded guilty to securities fraud and money-laundering charges for helping two penny-stock firms manipulate a number of initial public offerings. He spent 31 months in a federal prison near Eglin Air Force Base in Florida—where he could be close to his mother in Boca Raton.
After a three-year hiatus, of sorts, Madden, 50, is doing just that—and he’s not letting himself be rattled by critics. In the mid-’90s, Madden was a rock star to millions of young women who couldn’t get enough of his affordable bejeweled platforms and big-toed clogs. The college dropout who’d gotten his start peddling shoes on Long Island was Manhattan royalty, holding court in his SoHo flagship and sitting courtside at Knicks games. Then, in 2001, Madden pleaded guilty to securities fraud and money-laundering charges for helping two penny-stock firms manipulate a number of initial public offerings. He spent 31 months in a federal prison near Eglin Air Force Base in Florida—where he could be close to his mother in Boca Raton.
If there’s one thing Americans enjoy more than watching the mighty fall, it’s granting them forgiveness. “You have to go through a process. You made your mistake, you did your time,” Madden says. “You have to be a little contrite to get redemption.” To judge from the recent performance of his company, Madden’s been forgiven—at least by that segment of the population that favors shoes with animal prints, polka dots and four-inch heels. Sales were $475.2 million in 2006, up from $375.8 million the year he was released, while net income more than doubled to $46.3 million.
Not that prison was easy for anyone. When Madden’s legal troubles began, the company’s board appointed his childhood friend Jamie Karson as his replacement CEO. By all accounts, the next several years were bumpy. “It felt like a lot of people were running into each other,” says Wendy Madden, the company’s director of operations and a 16-year employee. “We had lost our leader” (though Wendy gained a husband, during a series of prison-cafeteria visits with Steve: “Prison was a very romantic place for us!” says the expectant mother of twins. “Actually, I should say it was a very romantic place for me”). In 2003, sales dropped. In Madden’s absence, the company’s shoes became dressier, less quirky and more expensive, a turnoff to some buyers. Higher shoe prices helped the company stay profitable. But the brand “lost some of its oomph and luster,” says Meghan Cleary, author of “The Perfect Fit: What Your Shoes Say About You.” As CEO Karson, who is under contract through next year, says: “You can’t fill Steve’s shoes.”
Madden continued to pull in a $700,000 annual salary while in prison, but he was prevented from serving as an officer of his company until 2008 as part of an agreement with the Securities and Exchange Commission. That didn’t mean he couldn’t design shoes, however, and as soon as he was sprung he started doing so with a vengeance. He sexed up ballet flats with pink buckles and sparkling jewels. For fall, there’s his new four-inch peep-toed Lovit, with candy-cane stripes and a giant bow on the tip, and the brown-suede Frinngee, which is advertised as a bit of “Bohemian chic.” All bear the wacky Madden sensibility evident in earlier successes like his bump-toed Mary Janes (called Mary Lous), which Madden says were so hot when they hit the street that “all the Long Island mothers were calling me to find out where they could get them.” His innovative styles helped fend off competitors like Skechers and BCBG Girls.
Madden continued to pull in a $700,000 annual salary while in prison, but he was prevented from serving as an officer of his company until 2008 as part of an agreement with the Securities and Exchange Commission. That didn’t mean he couldn’t design shoes, however, and as soon as he was sprung he started doing so with a vengeance. He sexed up ballet flats with pink buckles and sparkling jewels. For fall, there’s his new four-inch peep-toed Lovit, with candy-cane stripes and a giant bow on the tip, and the brown-suede Frinngee, which is advertised as a bit of “Bohemian chic.” All bear the wacky Madden sensibility evident in earlier successes like his bump-toed Mary Janes (called Mary Lous), which Madden says were so hot when they hit the street that “all the Long Island mothers were calling me to find out where they could get them.” His innovative styles helped fend off competitors like Skechers and BCBG Girls.
Madden is quick to admit that he’s made mistakes. But he says he wouldn’t change a thing about his life. “Everything I’ve done has gotten me to where I am today,” he says. His prison experience has clearly had an impact on his designs. The next offering from the prison groom: wedding shoes, called I Do. “It’s a huge market,” he says. “Marriage is sort of back on track.” And so is Steve Madden.
