Steve Madden's
According to Reuters, Steve Madden received takeover offers from unnamed parties, leading it to hire an investment banking firm to help it evaluate the usual strategic options, which could include a sale. The company's stock has fallen 46% over the last year, giving it a market cap of a mere $468 million, and its most recent bad news was cutting its guidance for the year due to weak consumer spending and a limited number of footwear trends to pursue.
A market cap of $400 million certainly is a sobering thought. I'd argue there's been a fad shoe bubble, and Madden's missed it. Consider ultra-trendy shoe purveyor Crocs
Trendy shoe provider Heely's
Deckers
Fashion is fickle. Shoe companies that are too faddish are poison for investors, especially in the current climate. As for Steve Madden, it sounds like it's out of step with the trends, and consumers' increasing skittishness makes things worse. Investors may pray for a buyout, but for some, it won't make up for their lost investment.
Consumers might start tightening their belts -- give me a non-faddish shoe stock any day. When it comes to shoes, utilitarian will be more fashionable for 2008. Stranger things have happened.
Try on these Foolish articles for size:
- Can Heely's turn things around with its new shoe, The Gamer? Its wheels really fell off last quarter.
- One Fool thinks it's still too early for Timberland.
- Shoes, of course, can be big business -- case in point, check out one Fool's shoe confessions.