Friday, September 3, 2010

This Makes Me Sick

I just saw this headline on The Cut:

Steve Madden Might End Up Owning Betsey Johnson in 2012

The article states:

Being in debt feels bad and scary enough, but what do you think it feels like to — instead of owing money to a financial institution — owe money to Steve Madden? Betsey Johnson knows, now that Steve Madden Ltd. has taken over a $48.8 million loan to her company, according to papers filed with the SEC late yesterday. Johnson, whose Fashion Week show is in ten days, has until August 20, 2012 to repay Madden — otherwise he might get her brand. And her stuff.

Madden already holds a license for handbags, small leather goods, belts and umbrellas under the Betsey Johnson and Betseyville trademarks. The collateral for the loan includes the company’s intellectual property, so Madden could be in line for the labels it holds as licensee. Also included among the items securing the loan are “the borrower’s personal property, accounts, deposit accounts and cash, equipment, fixtures, general intangibles, goods [and] inventory.”

A designer brand would be just the thing to add to Madden's stable. In addition to his own Steve Madden stores, he does shoes for Madonna's Material Girl line, just bought handbag company Big Buddah for $11 million, and just invested $5 million in Bakers Footwear Group, which could lead to a one-fifth stake in the company. So while other designers, like Johnson, struggle in this economy, Madden is doing pretty well. His second-quarter results were up, with net income growing 63 percent and sales up an impressive 36 percent, while the stock is up 71.2 percent from a year ago. Somewhere American Apparel is crying into all the overpriced meatpacking-district-nightclub shoes they never made.

Sure Steve Madden is doing great!  He's not investing any time or money into coming up with his own designs but just zips right into the market, stealing the good ideas of other designers.  And hoards of people buy his stuff because it's a cheaper version.  Who cares, right?

This is business, I understand, but I know the work that goes into a brand like Betsey's.  She's been creating and kicking ass for years.  It's tough times, I know but it makes me a little ill to know someone who blatently and unapologetically takes the work of other designers (and maybe commits a little stock fraud as well) could possibly get control  of her brand and work.

Betsey, we're rooting for you!

Steve Madden Roster of Shame - Intellectual Property Theft Examples:

 - From the Manolo - Balenciaga Sportiletto

 - From Haute Macabre - Alexander McQueen Faithful

 - From Shoe Daydreams - Miu Miu Naplak Patch

 - From Shoe Daydreams - Christian Louboutin Criss-cross Vamp

 - From Shoe Daydreams - Christian Louboutin Caracolo Zipper peep-toe


WendyB said...

But WTF was she thinking putting up all her personal possessions as collateral? What hole was she trying to dig herself out of that she was that desperate? Or did the company think expanding their retail outlets during a recession was such a surefire thing that they literally bet the house? If she defaults, someone is going to own her ass...does it really matter who? Is he worse than the banks?

MrB (who is sitting here) agrees with me that the planned expansion of the boutiques could be the kind of investment that this loan was intended for. He also points out that such loans can be used to maintain a certain kind of lifestyle, not that he's saying it's the case here. Just in general.

lisa said...

"Sure Steve Madden is doing great! He's not investing any time or money into coming up with his own designs but just zips right into the market, stealing the good ideas of other designers. And hoards of people buy his stuff because it's a cheaper version."

I thought the same thing as soon as I started reading this. The thing with his shoes is that impressionable girls looking for cheap shoe thrills at a good price are tempted by Steve Madden (and I shamefacedly admit I used to be one of them). I've regretted buying his shoes enough times that nowadays I've vowed to stay away from the brand entirely. They just fall apart or pinch your feet in funny places. Ick.

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