Building a Billion
Steve Madden, in his early 40s, had been implicated in the firm Stratton Oakmont’s “pump and dump” financial scandal, which will be familiar to anyone who’s watched Martin Scorsese’s The Wolf of Wall Street. In the film, Madden is portrayed as a shy, baseball cap-wearing shoe-selling Jew from Long Island, played by Dustin Hoffman' 32-year-old actor son, Jake Hoffman - who is real-life best buds with "Wolf" co-star, Jonah Hill.
The youngest of three brothers in an unhappy middle-class family, Madden, well on his way to alcoholism when he dropped out of college, got a job as a travelling salesman for a wholesale shoe company called L.J. Simone, which had been started by one of his childhood friends. Not only, he says in his book, “was I a bad driver, to begin with, but I’m ashamed to say that I was also high pretty much all the time, even when I was driving.” And yet! In one of many unexplained feats of charm, moxie, or force of will, Madden not only succeeded as a license-less travelling salesman, but he was also able to use his connections to start his own shoe company a few years later.
He opened his first standalone store in 1993 when he was in his early 30s, which brings us back to Stratton Oakmont. Madden was introduced to Belfort through yet another childhood friend and had received $500,000 from “a few of the guys at Stratton” as an early investment.
Next, Stratton took Madden’s company public with 3 million shares “valued at $15 million, a truly ludicrous amount for a company with one store and a few pairs of hot shoes,” Madden writes. And yet, he continues, “if you bought Steve Madden stock that day, even at the inflated price, and held onto it, you would be very rich today.”
In 2001, he pleaded guilty to federal charges of securities fraud and money laundering relating to pump and dumps with two separate financial firms. By then, Madden had relapsed multiple times, though he’d replaced alcohol with Vicodin. But even though Steve Madden as a person was falling apart, Steve Madden the company was doing better than ever. By the end of 2005, the year Madden was released from prison, the company had more than 100 stores in the U.S. alone.
Steve launched Steve Madden Music with a debut performance at the Ludlow store featuring then-unknown Katy Perry. Shwayze performed at the Ludlow store. Flagships opened in Hong Kong, Beijing, and Dubai. All American Rejects partnered with Steve Madden Music. Jazmine Sullivan also performed at the Ludlow store.
K'NAAN and Chester French performed at the Ludlow store. Lady Gaga partnered with Steve Madden Music. Steve began designing Elizabeth and James footwear with Ashley and Mary-Kate Olsen. His brand was again named as "Company of the Year" for 2009 by Footwear News. The company also reported record earnings of $500 million.
Steve Madden launched a new ready-to-wear collection. Steve Madden entered a joint venture with high-end sneaker brand UES. Steve Madden also acquired handbag company Big Buddha and launched Big Buddha footwear. Steve Madden was named Brand of the Year at the American Image Awards. Steve Madden acquired Betsey Johnson. Steve Madden brought back Big Head girls to celebrate 20 years of success. The second boutique opened in Soho, marking the company's 185th store worldwide.
Madden credits his employees and, by extension, his talents as an executive, for his company’s achievements. “The most successful meetings are the ones where a big decision is made and five different people leave the room thinking it was their idea,” he says. “The company wins when the team has ownership.” And so, despite anecdotes where he screams at employees, throws his phone repeatedly at the wall, and “tests” a prospective hire by demanding he return early from vacation for an interview, Madden comes off as an improbably effective C-suite manager.
By the end of his autobiography, though, how much of his achievements can be credited to luck is an open question. Even when The Wolf of Wall Street movie came out, Madden managed to reap an upside. “The movie also raised our brand awareness with young men and increased our name recognition,” he writes. “Nobody seemed to hold my mistakes against me.”