Steven Madden (NASDAQ:SHOO), the fashion and footwear wholesale company, has transformed its business over the last decade. It has outperformed companies like Deckers Outdoor (NYSE:DECK) and Finish Line (NASDAQ:FINL) in the footwear market. Steven Madden's revenue growth over the past five years looks compelling as compared to peers, and I think it's all set to carry the momentum forward.

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The global footwear market, according to Transparency Market Research, was worth $185.2 billion in 2011 and is expected to grow to $211.5 billion in 2018, growing at a compound annual growth rate of 1.9% from 2011 to 2018 . This growth is expected to be driven by the changing fashion trends and the rise in retail culture.

How Steven Madden has been performing
The third-quarter results of Steven Madden were quite solid despite a difficult retail environment. This shows that its diversified business model -- which includes multiple brands, product categories, distribution channels and geographic territories -- is working well. Consolidated net sales for the quarter increased 10.6% to $394.8 million, and net income grew 16.1% to 44 million, or $0.60 per diluted share .

Steven Madden had a good run in the international footwear market, posting revenue growth of 25% in the international market versus the year-ago period. This was a result of robust sales in China, Dubai and Mexico, along with a solid double-digit percentage gain in Canada where Steven Madden operates directly.

Some things to watch out for
However, there were a few hiccups in categories such as fashion belts, wholesale accessories, and private-label handbags. The decline in handbags was due to timing of shipments and the company expects the same to pickup in the upcoming quarter. However, an uptick in sales of branded handbags offset declines in private-label handbags.

Moreover, retail stores and e-commerce sales declined as both channels faced problems driving traffic to stores. Steven Madden will be launching a brand new e-commerce platform that would have new features to entice consumers. Important among them would be 360 degree view, compatibility with smart devices, and expedited shipping. The current trial of "free shipping with no hurdle" has already started showing notable improvements in driving traffic.

Branded retail stores saw a 3.5% decline in traffic. At the end of the quarter, Steven Madden operated 117 company-operated stores, including three Internet stores. The other 85% of the business is wholesale, direct-to-merchants like JW Nordstrom, Macy's, and Neiman Marcus, along with private-label merchandise for mass merchants like Target and Wal-Mart.

Deckers and Finish Line are profiting from a change in strategy
Steven Madden should think of switching away from the wholesale business model, like Deckers Outdoor. Deckers is transforming from a wholesale model to an omni-channel model. Its retail sales share has risen from 22% three years ago to 33% of overall sales in the recent third quarter. It is expanding into retail and online sales, and these two channels are slated to account for a larger share of sales going forward.

Deckers' grew its square footage by 56% year over year. That is far more aggressive when compared to Steven Madden, which added just four outlet stores during the quarter. Going forward, Deckers is planning to expand into regions that are smaller and less capital-intensive to improve profitability.

On the other hand, Finish Line is more of a mall-based operator, present at 659 Macy's stores. It recently posted estimate-beating second-quarter results, where sales increased 13.3% to $436 million and diluted earnings per share also moved north by 10.2% to $0.54.

Being primarily a mall-based operator, its success also depends on how much traffic is drawn to malls. Finish Line ended the quarter with 659 stores.

Going forward, Finish Line has ambitious plans to transform into a multidivisional, omni-channel retailer. This model is expected to generate $2.2 billion in annual sales by fiscal 2017, with digital revenue growing in the 20% range and store revenue increasing in the low-single digits.

Takeaway
Hence, we can see that both Deckers and Finish Line are favoring an omni-channel model going forward. If Steven Madden decides to adopt a similar strategy, it can widen the gap with its peers in the future. Madden's strong brand portfolio and geographical reach are strong points that it can use to its advantage, and all this makes the stock a good deal at a trailing P/E ratio of 20.

Fool contributor Mukesh Baghel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.