Glossy – With Steve Madden’s latest acquisition, the DTC sneaker brand Greats, the nearly 30-year old company is tackling several industry trends and customer demographics in one move.
Steve Madden is primarily known for women’s shoes, though the company has been trying to boost its sales among men for at least a few years now. Five-year-old Greats serves that purpose as a men’s brand while also giving Steve Madden a link to younger consumers who gravitate toward trendy DTC brands.
Steve Madden, the company’s founder, called out Greats’ popularity among young men as one of the major contributing factors in the company’s decision to acquire the brand.
“[Founder and CEO] Ryan [Babenzien]’s shoes are the talk among all the millennial men I encounter,” Madden said in a press release. “He reminds me so much of myself. We can’t wait to explode this thing.”
The terms of the deal were not disclosed. Greats did around $13 million in sales last year, according to a press release, and Steve Madden did $445 million last quarter, a record for the company.
In the past few years, Steve Madden has been actively acquiring brands and expanding its portfolio At least five brands have been purchased by Steve Madden over the course of the 2010s, all in various sectors of footwear from sportswear, like Superga, to casual womenswear like Blondo
Many of the brands rely heavily on wholesale partners — for example, Blondo is sold in Nordstrom, DSW and even Amazon, and Scwartz & Benjamin, acquired in 2017, makes licensed shoes for brands like Kate Spade and Rebecca Minkoff to sell in department stores. Greats, on the other hand, is a DTC-focused business selling mostly online and from its single store in New York City. It’s established a few wholesale partnerships including Nordstrom and Madewell since 2017. With the strongest growth for Steve Madden coming from the wholesale sector — 13% compared to just over 6% for its online business — it could be that Steve Madden is looking for a brand with built-in DTC knowledge.
Steve Madden is not alone in acquiring companies with skills that it lacks. Earlier this year, Vera Bradley acquired DTC jewelry brand Pura Vida for similar reasons: the ability to target younger customers more effectively. Similarly, Farfetch acquired Stadium Goods late last year to give it a foothold in the sneaker resale world.
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