Steve Madden's Sweet Spot: Dress Shoes, ‘Dupe Culture' and TikTok Fame

Yahoo

2 days ago

On the heels of its namesake's viral podcast, Steve Madden Ltd. is getting a lot of attention these days — from TikTok to Wall Street.
As fashion trends finally shift back to the dressier side, Steve Madden is in the sweet spot.
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Dress shoes. Check. Western boots and influence from Beyoncé's Cowboy Carter Tour. Check check. 'Trends, especially in women's dress shoes and western boots are starting to move Steve Madden's way,' said to Williams Trading analyst Sam Poser, who upgraded shares of the company's stock from 'hold' to 'buy. He added, 'It appears as if women looked in their closets, [and] realized they had no new dress shoes.'
Poser cited Madden's 'compelling new platform and kitten heel dress shoes' that have a strong price/value relationship. The new dress shoes could be a boost to the top and bottom lines, as the styles' retail price points are '30 percent to 70 percent above most of fashion sneakers' that were strong sellers for the brand over the past couple of years.
Telsey Advisory Group's (TAG) chief investment officer Dana Telsey has shares of Madden rated at 'market perform,' the equivalent of a neutral rating. She attended the company's product presentation during FFANY this month, and also noted the pick up in dress shoes and slowdown in sneakers, which she said can be a 'beneficial shift' for the brand.
Other product trends for the back half of the year include Madden 'leaning into Western influences and textures inspired by Beyoncé's Cowboy Carter aesthetic, incorporating elements such as fringe and rustic hardware,' according to Telsey. She noted that the brand continues to innovate within the dress shoe and sandal categories, with new silhouettes that feature the durable natural fiber raffia, snakeskin, crochet and jelly materials.
'An overall more seasonless offering is being created, with respect to boots and booties, as [Madden] intends to bring more unique styles to market that will work year-round,' Telsey said. 'These fashion-led product and design decisions reflect the company's broader goal, which is to stay ahead of trend curves while maintaining broad consumer appeal.'
In a 2024 interview, Madden told FN that his approach to product has always been the same. 'We just try to make cool shoes and that's it. We let the chips fall where they may. People put us into little slots. But the shoes are quite universal,' he said.
While the company's first quarter earnings missed Wall Street's sales expectations, it did easily beat the consensus of adjusted diluted earnings per share of 46 cents, coming in at 60 cents for the quarter. For the three months ended March 31, net income fell 8 percent to $40.4 million, or 57 cents a diluted share, on net sales that inched up just 0.1 percent to $551.4 million. Wall Street was expecting revenue of $556.3 million.
Madden has already included some price increases on some products. Company chairman and CEO Edward Rosenfeld said in the company's fourth quarter earnings conference call in February that Madden planned to cut the percentage of goods produced in China.
One surprise in the first quarter earnings report was how incredibly fast the company moved to limit the potential impact of tariffs on imports from China, shifting anything early in the production process that was capable of being moved elsewhere. That shift did not include the company's sourcing for the $360 million Kurt Geiger acquisition, which was completed one day before the earnings call on May 7.
'The stuff that was far along in the production process or done, we are taking the majority of that in, but we have worked with our factory partners and suppliers to negotiate price concessions on those goods, so we can at least mitigate some of the damage in the near-term, and again, keep those goods flowing and make sure we're still delivering fashion to our customers and consumers,' Rosenfeld told investors last month.
He said components in China were moved to other countries, adding that fall production in China for brands such as Steve Madden shoes or Dolce Vita shoes will be 'going to virtually nothing.' Some production in China, such as value-price apparel, will be less than 5 percent, which is taking longer to move.
Rosenfeld said at the time that certain wholesale customers were thinking more conservatively for their fall plans as they face consumer uncertainty over higher price points due to tariffs.
Since the earnings call, Madden the brand has been garnering a pop of attention following company founder and creative and design chief Steve Madden's May 21 interview on the fashion podcast 'The Cutting Room Floor,' after short clips surfaced on TikTok. On the day of the interview, shares of Madden closed at $24.69, and rose as high as $26.57 on June 9 in intra-day trading. (The shares on Thursday closed at $24.14.)
The no-holds-barred interview saw the brand founder criticize American President Donald Trump's tariff policy, and how China tariffs will raise prices on shoes.
Madden was asked about his brand's propensity for knocking off designer looks, and he was unapologetic about the knockoffs. One example he was shown was a Steve Madden shoe featuring an 'H' bridge reminiscent of the Hermès Oran sandal, a look that the design chief said, 'Obviously we know who it is. This is one of the greatest shoes in the world. We changed it a little bit.' He also spoke candidly about his time in prison following a guilty plea on charges involving securities fraud and money laundering.
'This free media followed Beyoncé making appearances earlier this spring completing her 'denim on denim on denim' look sporting Steve Madden jean boots,' TAG's Telsey noted.
So far, the podcast clips have received over 24 million views, Poser said this week.
According to the analyst, the increased attention around the brand as well as its new styles could have Macy's, Bloomingdale's, Nordstrom, Dillard's and DSW and other key retailers 'aggressively knocking the door to get more Steve Madden shoes, as they receive more requests from their customers.'
The analyst said consumer requests 'should put' Madden in the driver's seat with it comes to establishing terms with its wholesale partners, which could result in a gross margin improvement for the brand.
BTIG analyst Janine Stichter said Madden is 'well-positioned,' given its ability to democratize luxury footwear trends. Helping it is the growth of 'dupe culture,' a reflection she said of the 'increasing demand for mid-tier products that offer strong value propositions following large post-COVID price increases from luxury players.' Stichter added that younger generations have a more supportive view of dupe culture.
The big unknown is whether the pop in interest in the Steven Madden brand has staying power or if it's just a one-off viral moment.
'I think the key with this is just his authentic voice and how truly comfortable he is talking about himself and his life. And I really think in the culture today, that resonates so much for people. There's so much fake around us that a true voice becomes a really relatable thing,' said Jaqui Lividini, founder and CEO of brand strategy firm Lividini & Co.
She said that these viral moments are 'very hard to duplicate and very hard to manufacture,' and that when they catch on, it becomes magical. As for Steve Madden the company founder, 'he's opened himself to a new audience, so I think that's the win here,' Lividini said.
Another brand strategist, who requested anonymity, said, 'The bigger message here is that Steve is being listened to. He's being introduced to a new generation, a new consumer that didn't know him.'
While that could bring in a whole new customer base for the brand, this strategy expert cautioned that just as the shorter clips popped and became a runaway train, tomorrow could usher in the next big thing, taking potential customer base into a whole new direction.
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