Steve Madden: Crisis of the Sole

It’s lunchtime at Jerry’s in SoHo, and Steve Madden is sitting at his regular table, surrounded by loyalists and having a bit of a fit. “I want pink! Not blue!” he’s shouting in Long Islandese, holding up a fistful of Equal packets and shaking them in the air. He’s joking – well, half-joking anyway – about the lack of Sweet’N Low by quoting from the Hollywood-mogul satire Swimming With Sharks.

Outside, twentysomethings stroll down Prince Street lugging tall boxes containing Madden’s chunky-heeled version of this season’s hot boots. Down below, in the subway, hundreds of ads bear his name and company logo, as well as computer-distorted photographs of doe-eyed teenage hipsters wearing oversize shoes. Tonight, Madden will take his courtside seat at the Knicks game beside his golf buddy and board chairman, Charles Koppelman, the entertainment impresario who recently spearheaded the takeover of Ford Models.

But here at Jerry’s, Madden is so jittery he accidentally tears his Knicks ticket in two. Dressed in jeans, a white untucked oxford, and a Syracuse Orangemen baseball cap, the 43-year-old CEO looks unsettlingly collegiate. “I tell everyone I’m 42!” he shouts, in a voice that’s reminiscent of Richard Simmons and P. T. Barnum. “I lie!” he adds sarcastically. “I don’t know why.” His lawyer winces, and Madden is off on a jag recalling the early days, before he had a $200 million public company, celebrity customers like Julia Stiles, and a die-hard teen following that lines up for hours just to meet him at his stores.

“I worked in Toulouse,” he offers, referring not to France but to “a really hot store in the early seventies” in Cedarhurst, Long Island. “We sold platform shoes for men and women at the time of Ziggy Stardust, Alice Cooper. You remember when Elton had those platforms?” he asks, not waiting for an answer. “I was 16 years old. My boss was 26. He had his own business. He was this really cool guy. He drove a Mercedes. He was my idol.” Madden raises his arms to steer the imaginary Mercedes.

“It was just Providence, you know?” he says. “How lucky can a guy be to fall into a shoe store and make it your life’s work and be good at it? How lucky could a guy be?” Madden turns to his lawyer.

“The story’s sad,” Madden says. “It’s a real American story. My old friends took me public, they turned out to be crooks, and I’m innocent.”

“You tell me,” the lawyer deadpans.

“I don’t feel so lucky right now,” Madden adds quickly. Suddenly humbled, he falls silent.

Last summer, Madden’s luck turned when he was indicted for stock fraud and money laundering in both the Eastern and Southern Districts of New York. According to the charges, Madden secretly purchased stock on behalf of the principals of two corrupt penny-stock brokerage firms – Stratton Oakmont Securities of Lake Success, Long Island, and Monroe Parker, of Purchase, Westchester – helping them manipulate 29 initial public offerings, including that of his own company. That same day, the Securities and Exchange Commission came after him with a civil suit alleging Madden had employed “devices, schemes, and artifices to defraud.” If convicted in either of the criminal cases, which are scheduled to go to trial this spring, Madden faces up to more than twenty years in prison and several million dollars in fines. If he loses the SEC case, which is on hold until the criminal cases are completed, he could be forced to pay millions more. Even worse, he could be barred from serving as an officer or director of any public company, including his own.

On the day of his arrest, while Madden was busy pleading not guilty to all charges and pledging his East Hampton country house and the Long Island homes of two friends in order to make bail, shares of Steve Madden Limited fell almost 15 percent to $11.85 before nasdaq halted trading. Two days later, when the stock (which trades under the ticker SHOO) reopened, it fell to $6.88. Though the stock has traded up as high as $13.88 due to a recent rally in the footwear sector, it has yet to regain its pre-indictment momentum.

“The story’s sad,” Madden tells me. “It’s a great story. It’s a real American story. My old friends took me public, they turned out to be crooks, and I’m innocent.”

Even though he’s been indicted, Madden is keen to talk. “I’ve always thought I should be in New York Magazine,” he told me when I first contacted him in the fall. “I’m a New York story.” His fellow executives weren’t nearly as excited, and it took several calls to the company, as well as to Madden’s personal lawyers, before I could meet him. “People are afraid because I’m candid,” Madden explains. “They’re always worried I’m going to get into trouble.”

Even in an industry filled with colorful characters, Madden stands out. He speaks a mix of hip-hop lingo, Austin Powers-isms, and words of his own invention. One day in his showroom, he asks me, “You want a little lunchy-poo?” He also has a penchant for inventing nicknames: After our first phone conversation, I’m suddenly “Jo,” then, alternately, “Jo-Jo.”

Although Madden leads the sort of hip, expensive lifestyle you might expect of a rich, single, downtown New Yorker, he has his own quirky trademarks. He gets his wiry strawberry-blond hair cut by downtown stylist Jason Croy, but never appears in public without a baseball cap. He eats at fancy restaurants like EQ, but thinks nothing of whipping out nasal spray mid-meal. (“It’s bad,” he says, conceding he’s been addicted since childhood. “Afrin doesn’t work for me anymore.”) On weekends, when he’s not out at his home in the Northwest Woods or off golfing in Miami or Boca Raton, he likes to hang out at his SoHo flagship. “Sometimes, I’ll be here on a Sunday and I’ll think, What a loser you are! What am I doing here?

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.”

Rather than finish college, Madden took a sales job at Jildor, a popular shoe store in Cedarhurst. His former boss, Jan Friedman, recalls him as being “one of the most natural-born salesmen I’ve ever seen. He could sell anything to anybody.” After spending two years “like Al Bundy, with a little shoehorn hanging out of my back pocket,” Madden moved to Greenwich Village and took a job at L. J. Simone, a shoe wholesaler known for boots decorated with fringe and faux gemstones.

During the next eight years there, Madden expanded his repertoire to include marketing, manufacturing, and design. But his employment came to an end in July 1988; four months later, he got arrested for drunken driving. “I was whacked out,” Madden recalls. “Bad things happened when I drank.” An attempt to start a new business with a former Simone colleague faltered. But on January 9, 1989, Madden took his last drink. Six months later, he was out on his own. “I wanted to be in charge,” he says, “to be a boss.”

With only $1,100 in the bank, Madden designed a Western clog called the Marilyn. He used credit to have 500 pairs manufactured and charm to convince his doorman to pose as his chauffeur while he sold samples from the trunk of his car. It was the early nineties, the beginning of the seventies-fashion revival, and Madden’s thick-soled shoes quickly caught on. “He had a good eye,” recalls Bob Goldenberg, a retired shoe wholesaler who has known Madden for years. “He went through every booth in Europe at the shows.”

Madden’s breakout hit was the Mary Lou, a patent-leather Mary Jane with a big bump toe that won an instant following among teens. “I started getting calls from mothers all over the tri-state area,” he remembers. “Fifteen calls a day. The kids had nothing to wear to the bat mitzvahs, to the confirmations. This was something.” Before long, like any other successful small businessman, he needed cash to grow.

While madden was working his way up in the shoe industry, his best friend, Danny Porush, was stuck in a rut. After five years at Boston University, he left without getting a degree and bounced from job to job, working for, and starting up, a variety of small businesses, including an ambulance company called SureRide Ambulette. In 1988, while watching his son in the playground of his Bayside, Queens, apartment complex, he met an unlikely mentor: a dental-school dropout and former door-to-door meat and seafood salesman named Jordan Belfort. A short, brash, young Jewish guy, Belfort boasted he was making $50,000 a month selling penny stocks out of a boiler room in Great Neck. As Porush would later testify, Belfort confided the business was “half a scam,” but the chance to increase his income tenfold was a siren call Porush couldn’t resist. Two days after they met, he closed down SureRide and joined the firm.

“Steve will overcome,” vows his lawyer, Joel Winograd. “His company will continue to have record sales and earnings, and this will have a fairy-tale ending.”

Only two months later, Belfort and Porush opened their own brokerage company in a Queens car dealership (their third partner was a man Belfort had met when they both spent a summer selling ice cream at Jones Beach). With Belfort at the helm, the partners transformed their firm into a business that, at least on the surface, seemed rather impressive: the venerably named and auspiciously located Stratton Oakmont of Lake Success, Long Island.

Using fanciful scripts, the brokers – Belfort’s childhood friends from Queens, Porush’s golf buddies, money-crazed kids recruited from Long Island college campuses – sold and manipulated tiny, high-risk IPOs, according to testimony, by grossly exaggerating their prospects, boasting that they had inside information, and generally saying whatever was necessary to make a sale. Take those customers “to the mat,” Belfort would urge. “Rip their heads off!” Stratton’s underwritings encompassed a vast array of low-rent businesses: Repossession Auction, which was a Miami-based used-car dealership; Licon International, possibly so named because in order to sell the stock you had to “lie” and “con”; and Master Glazier’s Karate International, an Elizabeth, New Jersey-based martial-arts school with a total of four branches in only two states. Nearly all had the same trading pattern – the stocks would soar when Stratton touted them but then come crashing down when the brokers unloaded their stakes.

In 1992, Steve Madden made a decision that at the time seemed natural enough: He hired his best friend’s firm to be his banker. While Madden knew that the SEC had already accused Stratton of engaging in price manipulation and employing high-pressure sales tactics, he considered it a legitimate company. “They cleared through Bear Stearns,” Madden recalls, pointing out that Stratton’s link to the giant firm gave it an aura of respectability. Besides, Stratton was not only willing to raise capital for Steve Madden Limited in the private markets, it wanted to take the tiny, unproven company public. Like his friend Porush, Madden was going to enter the big leagues.

On December 13, 1993, only seven months after the first (and, at that time, only) Steve Madden shoe store had opened on Broadway in SoHo, Stratton Oakmont took the company public at $4 a share. The most active stock on the nasdaq on the day of its offering, SHOO closed at $8 a share, a huge gain in the pre-Internet era.

Just a few months later, it sunk to $3. With only $5.3 million in sales, a net loss of $900,000, and a boom-bust trading history, the company simply seemed to be another one of Stratton’s overhyped IPOs.

But it wasn’t. In 1994, Madden surprised his critics. With hardly any advertising, Madden increased sales by almost 40 percent. The next year, sales tripled to $39 million, prompting Madden to hire Rhonda Brown, the former merchandise president of Macy’s East, to become his chief of operations. Soon, Madden had celebrity customers – Carmen Electra, Sarah Michelle Gellar, Neve Campbell, Alyssa Milano, Mary J. Blige. By 1997, the company was generating $59 million in total sales, operating seventeen stores, and introducing a clothing line designed for “a customer who doesn’t break the law – but does break the rules.” That spring, in a lengthy profile in Footwear News, Madden compared his company to “an underground rock-and-roll band that gets its first hit single.”

Meanwhile, over in lake success, Porush and Belfort were struggling to stave off failure. While they were still raking in tens of millions a year from stock manipulations, regulators were working to put Stratton out of business. In March 1994, they nearly did: As part of a settlement with the SEC, Belfort was barred from the securities industry for life. But Porush managed to garner a lighter sanction, barred for just one year from supervising other brokers. In the wake of the ruling, Belfort continued to control the firm through Porush.

Inevitably, though, the relationship between the partners soured. In June 1996, seeking a respite from all the stress, Belfort took his wife and six of his friends for a Mediterranean cruise aboard his 170-foot yacht, which had originally been built for Coco Chanel. Setting out from Rome for Sardinia in the midst of a brutal storm, they nearly drowned when the boat broke in half and sank; they were rescued by the Italian Navy. It was a bad omen: Six months later, Stratton Oakmont was forced to shut its doors. The month after that, in January 1997, the company filed for bankruptcy.

By that time, Gregory Coleman, an agent in the FBI’s securities-fraud squad at 26 Federal Plaza, had been investigating Stratton for several years. In 1995, under instructions from federal prosecutors, Coleman sent out a flurry of subpoenas to some of Stratton’s clients, including Madden, in an effort to create a panic that would culminate in a race to the government’s door. It didn’t work, but in the end, Coleman got lucky.

On a quiet night in 1995, a security guard at Queens Plaza noticed a Bentley and a limousine meeting in the parking lot, and the exchange of a bag. Thinking it a drug deal, the guard called the police, who arrested Todd Garrett, a martial-arts expert, with $200,000 in cash. (He was subsequently charged with possession of an illegal handgun.) As Belfort later testified, Garrett happened to be his drug dealer, but according to federal prosecutors, what Garrett was doing that night had nothing to do with drugs; rather, he was functioning as a clearinghouse for Porush and Belfort’s illegal proceeds, disbursing them in cash to contacts who would secrete them in their luggage and launder them in Switzerland.

One year later, U.S. Customs officers in Miami arrested a young French private banker who worked for Union Banquaire Privée in Switzerland. The arrest was made as part of an unrelated money-laundering sting operation, but hoping to win a lighter sentence, the banker began to talk. By sheer coincidence, he had two clients who were of particular interest to the government: Jordan Belfort and Danny Porush.

On September 2, 1998, just a few minutes after pulling out of the driveway of his Old Brookville mansion to take his 5-year-old daughter to the video store, 36-year-old Jordan Ross Belfort was arrested for conspiracy to commit money laundering and securities fraud. The next day, 41-year-old Daniel Mark Porush was nabbed down in Boca Raton. Faced with maximum sentences of twenty years in prison, both men came to the same conclusion: After only a week in jail, they decided to flip.

“It was like taking down the heads of a major crime family,” says former assistant U.S. attorney Joel Cohen, the prosecutor in the indictment. “But in this case, the organized crime was the brokerage business.” Porush and Belfort secretly wore wires to record their friends and dragged down dozens in their wake: lawyers and accountants, bankers and brokers.

For the government, Steve Madden was one of the biggest catches in the dragnet. The shoe mogul had been a focus of the investigation for some time; the SEC had cited his company’s IPO as one of those that had been manipulated, and believed that Madden was routinely getting, and flipping, stock in other Stratton deals.

Although some of Stratton’s IPOs had grown into profitable businesses, only Madden’s company had become a significant success. But according to Belfort, the celebrity CEO was also a “rat hole,” a place to hide stock. Porush, his P.S.1 buddy, didn’t hesitate to give him up either. Madden, as he recently testified at the trial of Stratton’s former auditor, was “deep into the fraud with us.”

According to the Madden indictments, the designer’s personal connection to Stratton began in 1991, when Madden agreed to secretly buy and sell stock in Stratton deals on Porush’s behalf with “the understanding that he would incur no risk.” (Porush, as a principal of the firm, was restricted in his ability to trade stock in these companies.) The deal was that Madden would earn a “predetermined profit on each transaction,” then kick back to Porush a significant portion of the proceeds, either in cash or by purchasing stock from Stratton that was deliberately overpriced. Once Belfort was barred from the securities industry in 1994, Madden allegedly entered a similar agreement with him regarding the Stratton spinoff Monroe Parker.

But according to the SEC, Madden wasn’t only ripping off the general investing public, he was ripping off his own shareholders as well. In early 1993, the SEC alleges, Madden agreed that the IPO of his company would “be a manipulation similar to previous Stratton IPO manipulations … such as Master Glazier’s Karate International.” In exchange for his agreement to “follow Porush and Belfort’s instructions,” they allegedly promised “that even if SHOO … went bankrupt, Madden would make money on the SHOO IPO.”

In addition, as Belfort recently testified at the Stratton auditor’s trial, Belfort “had a secret deal with Steve Madden to maintain control of his company after it went public.” Because Belfort and his partners had financed Steve Madden Limited’s early development, they owned a majority stake in the company before it went public. But the National Association of Securities Dealers refused to list SHOO unless Belfort – then under investigation for securities fraud – dramatically reduced his stake. As Belfort testified, he agreed to sell his shares to a corporation controlled by Madden to placate the NASD, but it was a bogus transaction. “Under the secret deal which we had written down and legally signed,” says Belfort, he was the true owner.

Belfort exerted an extraordinary influence over the company. Stratton’s auditor, who was a friend of Belfort’s, also became Madden’s auditor. In 1994, after Belfort was kicked out of the securities industry, he even joined SHOO as a consultant. In addition, according to Porush’s testimony, key Madden employees were given stock in Stratton IPOs as part of their compensation. (A Madden spokesperson denies such an arrangement existed.) As Porush explained, “Part of the package when we recruited people for Steve Madden was … because you’re in with us, you’ll make money on every new issue.”

In 1997, the Belfort-Madden friendship ended abruptly around the time Belfort asked Madden to sell some of the SHOO stock he secretly owned. Madden refused, and the dispute quickly turned into a bitter lawsuit, during which Belfort produced the deal they had signed. Madden admitted the signature was his but insisted he had been “manipulated” and “tricked” into signing by someone he had “trusted as my friend, business associate, underwriter, and confidant.” According to Madden, the demise of the friendship actually preceded the lawsuit, “when Belfort started showing up stoned for work.”

“I have no intention of allowing Jordan Belfort to ruin SML’s bright future by threatening me or by tarnishing the company’s reputation,” Madden vowed at the time. Ultimately, he settled the suit for $4.3 million in cash, an outcome that favored his adversary.

In the fall of 1999, around the time the government went public with the news that Porush and Belfort had been secretly cooperating, the U.S. Attorney’s Office approached Madden’s personal attorney, Joel Winograd, to discuss its case against his client. Soon, rumors that Madden might be indicted began wending their way around Wall Street.

When Madden was finally indicted last June, people who knew him from high school began flooding into Jildor to discuss the charges. “I would tell them, ‘That’s what they have lawyers for,’ ” says Jildor senior vice-president Larry Bienenfeld. “I would say that if he was diagnosed with cancer, that’s a problem. This is something that can be fixed.”

If the first (and, so far, the only) trial to come out of the Stratton investigation is any guide, the charges against Madden may be difficult to prove beyond a reasonable doubt. That trial – of the firm’s former auditor, Dennis Gaito – resulted in a hung jury in December after Gaito’s attorney, Ronald Fischetti, focused his efforts on destroying the credibility of Porush and Belfort. “As long as Porush and Belfort say what the government wants them to say, they have a free ride,” says Fischetti. “No one is checking to determine what happened to those millions and millions that they stashed away.”

Joel Winograd seems likely to pursue a similar strategy. A heavyset, white-haired Long Islander who has known Madden for fifteen years, Winograd delights in deriding Porush and Belfort as “devils in business suits.”

“Even when he was tape-recording for the government,” Winograd says of Belfort, “he would write notes on his hand to betray the government: ‘Don’t talk, I’m recording you.’ Is this the sort of person the government wants to use as a witness in the important aspects of another person’s life?”

Belfort, Winograd continues, “even cheats at golf.” Madden, by contrast, is not only a “great golfer” but a “good guy,” a “straight shooter” who “treats his mother like a queen.” Madden, says Winograd, is “being used by Jordan and Danny as one of the keys to open their jail cells that they should be in.”

As Winograd sees it, the fact that Madden had an account at Stratton doesn’t mean he knew what Porush and Belfort were doing, let alone that he was in any way involved. Madden “was buying stock and making money, buying stock and losing money. He made more than he lost, but he didn’t know what improprieties they were involved in.”

As Madden himself put it in the course of his lawsuit with Jordan Belfort: “My strengths as a businessman lie in the design and sale of women’s shoes, and I have never been comfortable with complicated or technical legal or business documents … I have always relied on the people around me.”

When I ask why Madden employed Belfort as a consultant at Steve Madden Limited in 1994, after he was barred from the securities industry, Winograd replies, “Steve Madden is a loyal friend and a devoted human being. He didn’t turn his back on Jordan Belfort in his time of need.” And what about the $80,000 cash kickback Madden allegedly gave to a Stratton golf buddy in the locker room of the Engineers Country Club in Roslyn, Long Island? “It’s totally ridiculous,” says Winograd. “Cash? The government can explain from here to kingdom come. There is no way Steve would have had that amount of cash, and he wouldn’t have had that in a bag walking around a country club. I think these fellows have watched too many spy thrillers.

“Let’s say Steve was fooled,” Winograd summarizes. “You can be savvy in business, but you may not be savvy in love and friendship.”

In any case, “Steve will overcome,” he vows. “His company will continue to have record quarters of sales and earnings, and this will have a fairy-tale ending.”

Perhaps. But even if Madden is acquitted in both of his criminal trials, he could still lose the civil case and, possibly, control of his company. For Steve Madden Limited, such an outcome might be manageable. “Mr. Madden is extremely talented and a tremendous business partner, and he’s wonderful,” says the company’s president, Rhonda Brown. “But we could continue to grow our business profitably … whether he’s on the golf course, or whatever.” For Steve Madden the man, it could be devastating. “My life,” he says, “is my company.”

it’s a cold, gray saturday in soho, but inside his lower-Broadway flagship boutique, Madden is absorbing teen consumer culture. Hip-hop is blaring on the sound system; girls in black leather jackets and jeans are lining up three-deep at the steel shoe displays. Madden kisses me hello, and with his arms folded across his chest proclaims: “This is a regular Saturday.” Madden roams the deep, narrow selling floor, shoving his hand into insteps, caressing soles, and obsessing over the most minor details of the handiwork.

“I love that boot,” he intones to a young dark-haired woman trying on narrow-toed black faux-crocodile boots with a two-inch platform heel. “Where else could you ever get anything like this?” he asks. “Where could you ever see anything like this?”

“I built all this,” he tells me, waving his arm at the expanse of his crowded boutique. “And they … ” he says, referring to Porush and Belfort. But he trails off without completing his sentence. “It’s Russian,” he says, finally. “Like Dostoyevsky.”

Steve Madden: Crisis of the Sole