Steve Madden's Apparel Unit Gains On BB Dakota Acquisition

Steve Madden, Ltd (NASDAQ:SHOO) is on a buyout spree. The company has recently acquired a direct-to-consumer, California-based company, BB Dakota. With this acquisition, Steve Madden will be able to expand its apparel category. Financial details of the deal remain undisclosed.

BB Dakota, founded in 2005, is known for its high-quality, classic and effortless contemporary women’s apparel. The company’s products include its own brand BB Dakota, Jack by BB Dakota as well as licensed brand Cupcakes and Cashmere. These products are available in department stores, e-commerce retailers, specialty boutiques and on bbdakota.com. As of Jun 30, 2019, BB Dakota generated sales of nearly $43 million.

This buyout follows Steve Madden’s recent purchase of Italian sneakers company — Greats Brand, Inc. Per recent market trends, BB Dakota is yet another DTC brand looking to fortify its presence among a wide customer base.

In January 2018, Steve Madden acquired the license for Anne Klein footwear and handbags. The company's wholesale accessories and footwear segments gained from this acquisition. Some of Steve Madden’s other notable buyouts include Schwartz & Benjamin in 2017, and footwear brands Dolce Vita and Blondo, to name a few. We believe these acquisitions have benefited the company’s top line to some extent.

Keeping in these lines, the company’s sales picture appears impressive. Notably, the top line increased 12.4% year over year to $445 million during second-quarter 2019. For 2019, Steven Madden envisions net sales growth of 5-7%.

All said, we hope that the addition of BB Dakota to its existing portfolio will boost growth for this Zacks Rank #3 (Hold) company in the near term and help it get back on track.

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