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Steve Madden: Crisis of the Sole

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Among Madden's mostly young and female employees, many of whom are his close friends, stories about his shoe obsession are legendary. One morning in his Manhattan showroom, I get to watch him in action. In front of about twenty department-store buyers, he grabs a $69 pair of white faux Pumas with a thick rhinestone racing stripe and begins to tell a story. "There's a girl in the Beverly Center," he says, "that's taking Pumas, putting jewels on them, and selling them all over the country." He pauses for the punch line: "She's charging $300." For Madden, "the greatest thing in the world is to make shoes, to see people buying something you brought to the market . . . There's no amount of money that can replace that feeling."

As one might expect, Madden frequently attests to his innocence, but often with a sense of humor. At one point, after proclaiming "I'm innocent," he commands me to "put an exclamation point there!" Then he reaches over, grabs my pen, and puts it in himself. One morning, when we're talking about the battle between Al Gore and George W. Bush, he suddenly declares, "I may have to call one of them up for a pardon one day," and elbows me hard in the ribs.

While the indictment has severely damaged Steve Madden Limited's standing on Wall Street -- there's a consolidated class-action shareholder lawsuit pending against the company, and it has hired Bear Stearns to explore "all possible strategic options," including an outright sale -- it hasn't tarnished Steve Madden's reputation as a design and marketing genius. "He has some special knack at figuring out what teen girls want to wear," says Sanford Bernstein analyst Faye Landes. According to teen-market consultant Irma Zandl, who ranks Madden with Nike and Adidas in the top five brands that girls favor, his shoes are popular because they are fabulously over-the-top. "Steve Maddens are not for the conservative girl," she says. "If he's going to add leopard skin, he'll do it ten times more outrageously than anybody else. It's for people who think less is less."

Every week, Madden still gets more than a thousand e-mails from his customers, only a handful of which refer to his legal predicament. In fact, the company is not only refusing to retrench, it is aggressively expanding. This week, at the Grammy Awards, the company will make a bid for high-profile customers by giving out fluffy leopard-print slippers to special guests. Three days later, at the Western Shoe Association show in Las Vegas, Madden will introduce his newest product line: Steve Madden Mens.

The Long Island City headquarters of the empire Steve Madden is in danger of losing is an unusual mix of the religious and the mundane. From the outside, the Tudor complex looks like an ordinary Queens building; inside, it's a kind of Jewish teen-girl heaven, with only Madden's shoes outnumbering the ubiquitous mezuzahs. "Steve is very spiritual," explains his assistant, Abby, a raspy-voiced twentysomething with a thick New York accent. A Hasidic rabbi from Greenpoint comes in weekly to do a "mock minyan"; a Hindu pundit, as well as experts in feng shui, have come in to bless the premises.

Spanish music blasts on the factory floor, and the pungent odor of shoe polish mixes with the aroma of Kentucky Fried Chicken. Madden's shoes are scattered everywhere -- spindly heeled open-backed mules, three-inch-high platform boots, four-inch-high wooden-stacked-heel sandals -- and, as I stand in the hallway in thick-heeled green-and-brown Prada pumps, an executive who looks like Barry Manilow proclaims, "We just copied your shoes!"

Tucked into a back corner near customer service, Madden's expansive office is being remodeled. Inside, only twenty pairs of shoes are lined up in tidy rows, and his art -- a painting of the New York Stock Exchange depicting Wall Street as a golf course, an autographed picture of Muhammad Ali meeting the Beatles, and a photo of Madden's Lawrence High School golf team -- is leaning against the wall.

The hyperactive son of a popular Five Towns couple -- his mother was a Jewish homemaker, his father an Irish Catholic textile manufacturer -- Madden was more street-smart than studious. "He was an average student," recalls Steven Karp, a family friend. Still, he was "one of the brightest kids we knew," says childhood friend Jamieson Karson, a real-estate lawyer who joined the Madden board last month.

In second grade at P.S.1 in Lawrence, Long Island, Madden and a boy named Danny Porush became best friends. The son of a successful nephrologist, Porush eventually left public school for the private Woodmere Academy, but the two stayed close and remained so for the next three decades.

In high school, while his friends tooled around Lawrence in sports cars their parents had bought them, the middle-class Madden took a job at a shoe store to make some extra cash. The opportunity to meet lots of girls, the thrill of making a sale -- "I fell in love with it right away," he recalls.

When not at the store, Madden hung out at the Lawrence Golf Club, perfecting his golf game and trying to fit in with the flashy grown-ups. "He was a wise-guy kid," says a Five Towns attorney who was a member of the club. "He loved gambling." A product of the high-living seventies, Madden also loved drugs and drinking. He went off to the University of Miami in 1975, only to return home two years later when his father called him up and announced, "I'm not paying any more money for you to play golf and take Quaaludes."


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