Steve Madden on Monday announced that it has completed the acquisition of sneaker startup Greats Brand, Inc. for an undisclosed amount.
Founded in 2014 as a digital native and now also running a store in New York's SoHo shopping district, Greats specializes in premium Italian-made sneakers. The company had $13 million in net sales in the 12 months ended June 30, according to a company press release.
On Tuesday, Steve Madden announced that the company also bought women's apparel brand BB Dakota for an undisclosed amount. Founded in 2005 and sold through department stores and off-price stores, as well as its own website, the brand had net sales of about $43 million in the same period, according to another release.
Steve Madden has gone shopping after a quarter of record sales growth, and with $248.8 million in cash, cash equivalents and current marketable securities on hand. Net sales in its most recent quarter rose 12.4% to $445 million, as adjusted net income reached $39.5 million from $35.2 million in the year-ago quarter.
Both of these acquisitions should help further the company's ambitions. BB Dakota is a good fit with its already strong women's apparel and shoe sales, with similar price points and audiences. Greats, meanwhile, helps the company lift its weaker men's game, according to Matt Powell, senior industry adviser of sports at The NPD Group.
"Madden has been very successful in women's footwear, but has never had a men's brand to leverage. This also puts Madden into the digitally native channel to compete with Allbirds, Rothy's, Veja, etc.," he told Retail Dive in an email, adding that, with athleisure continuing to grow, "this is an on trend move. For Greats, they gain access to capital and infrastructure. Win for both."
That's how Greats and Madden executives see it, too. Greats Founder and CEO Ryan Babenzein in a statement called Madden himself "a true maverick," and that "Getting the chance to collaborate with and learn from Steve and the rest of the Madden Company to accelerate my business is something that made a ton of sense to me."
Madden expressed similar eagerness. "Rarely in my 30 years since I started Steve Madden have I come across an opportunity as exciting as this," he said in a statement. "Ryan's shoes are the talk among all the millennial men I encounter. He reminds me so much of myself. We can't wait to explode this thing."
While Greats' production is based in Italy, that doesn't serve up much protection in light of tariffs, because higher "materials and labor costs offset tariff savings," Powell also said.