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.