sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 3)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
STEVEN MADDEN, LTD.
-------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
-----------------------------------------
(Title of Class of Securities)
556269108
---------
(CUSIP Number)
Mr. James A. Mitarotonda
c/o Barington Companies Equity Partners, L.P.
888 Seventh Avenue, 17th Floor
New York, NY 10019
(212) 974-5700
--------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
DECEMBER 13, 2004
-----------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following
box: |_|.
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Barington Companies Equity Partners, L.P. 13-4088890
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 288,937
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
288,937 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
288,937
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.21%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Barington Companies Investors, LLC 13-4126527
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 288,937
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
288,937 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
288,937
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.21%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
James Mitarotonda
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 337,472
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
337,472 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
337,472
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.58%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Barington Companies Offshore Fund, Ltd. (BVI)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 48,535
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
48,535 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
48,535
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.37%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Barington Companies Advisors, LLC 20-0327470
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 48,535
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
48,535 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
48,535
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.37%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Barington Capital Group, L.P. 13-3635132
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 337,472
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
337,472 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
337,472
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.58%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LNA Capital Corp. 13-3635168
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 337,472
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
337,472 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
337,472
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.58%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Parche, LLC 20-0870632
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 105,496
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
105,496 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
105,496
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.81%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Admiral Advisors, LLC 37-1484525
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 659,348
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
659,348 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
0O
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ramius Capital Group, LLC 13-3937658
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 659,348
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
659,348 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
0O
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
C4S & Co., LLC 13-3946794
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 659,348
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
659,348 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
0O
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Starboard Value & Opportunity Fund, LLC 37-1484524
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 553,852
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
553,852 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
553,852
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.24%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
0O
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Peter A. Cohen
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY none
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 659,348
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
none -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
659,348 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Morgan B. Stark
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY none
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 659,348
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
none -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
659,348 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Jeffrey M. Solomon
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY none
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 659,348
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
none -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
659,348 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Thomas W. Strauss
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY none
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 659,348
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
none -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
659,348 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
659,348
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.05%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
RJG Capital Partners, LP 20-0133443
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8,600
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
8,600 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
8,600
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.066%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
RJG Capital Management, LLC 20-0027325
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8,600
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
8,600 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
8,600
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.066%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. 556269108
1 NAME OF REPORTING PERSONS S.S. OR
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ronald Gross
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8,600
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON none
WITH ----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
8,600 -
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
none -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
8,600
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.066%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
This Amendment No. 3 amends and restates the Schedule 13D filed with the
Securities and Exchange Commission on July 30, 2004, as amended by that certain
Amendment No. 1 filed on November 12, 2004 and that certain Amendment No. 2
filed on November 18, 2004 (together, the "Statement"), by and on behalf of
Barington Companies Equity Partners, L.P., Barington Companies Investors, LLC,
James Mitarotonda, Barington Companies Offshore Fund, Ltd. (BVI), Barington
Companies Advisors, LLC, Barington Capital Group, L.P., LNA Capital Corp.,
Parche, LLC, Starboard Value & Opportunity Fund, Admiral Advisors, LLC, Ramius
Capital Group, LLC, C4S & Co., LLC, Peter A. Cohen, Morgan B. Stark, Jeffrey M.
Solomon, Thomas W. Strauss, LLC, RJG Capital Partners, LP, RJG Capital
Management, LLC and Ronald Gross with respect to the common stock, par value
$0.0001 per share, of Steven Madden, Ltd., a Delaware corporation.
Item 1. SECURITY AND ISSUER.
This Statement relates to the common stock, par value $0.0001 per share
(the "Common Stock"), of Steven Madden, Ltd., a Delaware corporation (the
"Company"). The principal executive offices of the Company are located at 52-16
Barnett Avenue, Long Island City, New York 11104.
Item 2. IDENTITY AND BACKGROUND.
(a) - (c) This statement is being filed by Barington Companies Equity
Partners, L.P. ("Barington LP"), Barington Companies Investors, LLC ("Barington
Investors LLC"), James Mitarotonda, Barington Companies Offshore Fund, Ltd.
(BVI) ("Barington Offshore"), Barington Companies Advisors, LLC ("Barington
Advisors LLC"), Barington Capital Group, L.P. ("Barington Capital LP"), LNA
Capital Corp. ("LNA"), Parche, LLC ("Parche"), Starboard Value & Opportunity
Fund, LLC ("Starboard"), Admiral Advisors, LLC ("Admiral"), Ramius Capital
Group, LLC ("RCG"), C4S & Co., LLC ("C4S"), Peter A. Cohen, Morgan B. Stark,
Jeffrey M. Solomon, Thomas W. Strauss, RJG Capital Partners, LP ("RJG LP"), RJG
Capital Management, LLC ("RJG LLC") and Ronald Gross (each, a "Reporting Entity"
and, collectively, the "Reporting Entities").
As of the date of this filing, the Reporting Entities are the beneficial
owners of, in the aggregate, 1,005,420 shares of Common Stock, representing
approximately 7.7% of the shares of Common Stock presently outstanding.
Barington LP is a Delaware limited partnership formed to engage in the
business of acquiring, holding and disposing of investments in various
companies. The address of the principal offices of Barington LP is 888 Seventh
Avenue, 17th Floor, New York, New York 10019.
Barington Offshore is a limited company organized under the laws of the
British Virgin Islands formed to engage in the business of acquiring, holding
and disposing of investments in various companies. The address of the principal
offices of Barington Offshore is c/o Bison Financial Services Ltd., Bison Court,
Road Town, Tortola, British Virgin Islands. The officers and directors of
Barington Offshore and their principal occupations and business addresses are
set forth on Schedule I and incorporated by reference in this Item 2.
The general partner of Barington LP is Barington Investors LLC. Barington
Investors LLC is a Delaware limited liability company formed to be the general
partner of Barington LP. The address of the principal offices of Barington
Investors LLC is 888 Seventh Avenue, 17th Floor, New York, New York 10019. James
Mitarotonda is the Managing Member of Barington Investors LLC. The business
address of Mr. Mitarotonda is c/o Barington Capital Group, L.P., 888 Seventh
Avenue, 17th Floor, New York, New York 10019.
Barington Investors LLC is a majority-owned subsidiary of Barington Capital
LP. Barington Capital LP is a New York limited partnership engaged in the
business of acquiring, holding and disposing of investments in various
companies. The address of the principal business and principal offices of
Barington Capital LP is 888 Seventh Avenue, 17th Floor, New York, New York
10019.
Barington Capital LP is also the Managing Member of Barington Advisors LLC,
the investment advisor of Barington Offshore, which has voting power with
respect to the shares owned by Barington Offshore. Barington Advisors LLC is a
Delaware limited liability company formed to be the investment advisor of
Barington Offshore. The address of the principal offices of Barington Advisors
LLC is 888 Seventh Avenue, 17th Floor, New York, New York 10019.
The general partner of Barington Capital LP is LNA. LNA is a Delaware
corporation formed to be the general partner of Barington Capital Group, L.P.
The address of the principal business and principal offices of LNA is: c/o
Barington Capital Group, L.P., 888 Seventh Avenue, 17th Floor, New York, New
York 10019. James Mitarotonda is the sole stockholder and director of LNA. The
officers of LNA and their principal occupations and business addresses are set
forth on Schedule I and incorporated by reference in this Item 2.
Each of Starboard and Parche is a Delaware limited liability company formed
for the purpose of making equity investments and, on occasion, taking an active
role in the management of portfolio companies in order to enhance shareholder
value. The address of the principal offices of Starboard and Parche is 666 Third
Avenue, 26th Floor, New York, New York 10017.
The Managing Member of each of Starboard and Parche is Admiral, a Delaware
limited liability company formed to be the managing member of Parche and
Starboard. The address of the principal offices of Admiral is 666 Third Avenue,
26th Floor, New York, New York 10017. The sole member of Admiral is RCG. RCG is
a Delaware limited liability company that is engaged in money management and
investment advisory services for third parties and proprietary accounts. The
address of the principal offices of RCG is 666 Third Avenue, 26th Floor, New
York, New York 10017. The Managing Member of RCG is C4S, a Delaware limited
liability company formed to be the managing member of RCG. The address of the
principal offices of C4S is 666 Third Avenue 26th Floor, New York, New York
10017. Each of Peter A. Cohen, Morgan B. Stark, Jeffrey M. Solomon and Thomas W.
Strauss is a Managing Member of C4S. The business address of each of Messrs.
Cohen, Stark, Solomon and Strauss is 666 Third Avenue, 26th Floor, New York, New
York 10017.
RJG LP is a Delaware limited partnership formed to engage in the business
of acquiring, holding and disposing of investments in various companies. The
address of the principal offices of RJG LP is 11517 West Hill Drive, North
Bethesda, Maryland 20852.
The general partner of RJG LP is RJG LLC. RJG LLC is a Delaware limited
liability company formed to be the general partner of RJG LP. The address of the
principal offices of RJG LLC is 11517 West Hill Drive, North Bethesda, Maryland
20852. Ronald Gross is the Managing Member of RJG LLC. The business address of
Mr. Gross is c/o RJG Capital Management, LLC, 11517 West Hill Drive, North
Bethesda, Maryland 20852.
(d) - (e) During the last five years, none of the Reporting Entities or any
other person identified in response to this Item 2 was convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Each natural person identified in Item 2 is a citizen of the United
States.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As of the filing date of the original Statement, the amount of the funds
expended for all purchases of Common Stock by the Reporting Entities was
approximately $4,906,534.26 by Barington LP, $670,012.68 by Barington Offshore,
$1,525,369.40 by Parche, $8,056,102.87 by Starboard and $165,861.22 by RJG LP.
Since the filing of the original Statement and as of the filing date of
Amendment No. 1 to the Statement, the Reporting Entities purchased an aggregate
of 155,700 shares of Common Stock. The amount of the funds expended for such
purchases was approximately $580,316.14 by Barington LP, $149,658.04 by
Barington Offshore, $326,640.72 by Parche and $1,714,872.85 by Starboard.
Since the filing of Amendment No. 1 to the Statement and as of the filing
date of Amendment No. 2 to the Statement, the Reporting Entities purchased an
aggregate of 37,000 shares of Common Stock. The amount of funds expended for
such purchases was approximately $85,259.50 by Barington Offshore, $88,286.72 by
Parche and $463,505.28 by Starboard.
As of the filing date of this Amendment No. 3 to the Statement, the
aggregate amount of the funds expended for all purchases of Common Stock by the
Reporting Entities was approximately $5,486,850.40 by Barington LP, $904,930.22
by Barington Offshore, $1,940,296.84 by Parche, $10,234,481 by Starboard and
$165,861.22 by RJG LP.
All purchases of Common Stock by the Reporting Entities were made in open
market transactions as described in the Schedules attached to the original
Statement, and the amendments thereto, except as otherwise provided below. All
such purchases of Common Stock were funded by working capital, which may, at any
given time, include margin loans made by brokerage firms in the ordinary course
of business.
Certain shares reported in the Statement as owned by Parche were acquired
in private transactions with various transferors for which RCG or an affiliate
serves as the investment manager, the managing member, or the managing member of
the investment manager. Parche acquired from such transferors an aggregate of
59,444 shares of Common Stock on July 20, 2004 at a per share price of $19.00,
equal to the last reported sales price on the NASDAQ National Market System on
the date the transaction was completed, or an aggregate of $1,129,436. RCG is
the sole member of Admiral, which is the managing member of each of Starboard
and Parche. The total of 59,444 shares transferred to Parche were initially
acquired by the transferors for an aggregate of $1,138,572.26 (excluding
commissions and other execution related costs). Such transferors had, within the
60 days prior to the filing of the Statement, effected the following
transactions in the Common Stock: 6/25/04 purchased 2,667 shares at a price per
share of $19.4691; 7/1/04 purchased 3,285 shares at a price per share of
$19.7835; 7/2/04 purchased 512 shares at a price per share of $19.7756; 7/6/04
purchased 1,200 shares at a price per share of $19.6035; 7/7/04 purchased 400
shares at a price per share of $19.5484; 7/8/04 purchased 1,200 shares at a
price per share of $19.4420; 7/12/04 purchased 295 shares at a price per share
of $19.5060; 7/13/04 purchased 480 shares at a price per share of $19.6910;
7/14/04 purchased 3,120 shares at a price per share of $19.9434; 7/15/04
purchased 7,088 shares at a price per share of $19.7000; 7/15/04 purchased 376
shares at a price per share of $19.6689; 7/16/04 purchased 4,000 shares at a
price per share of $18.9000; 7/16/04 purchased 9,882 shares at a price per share
of $19.2310; 7/19/04 purchased 6,120 shares at a price per share of $18.4187;
7/20/04 purchased 1,836 shares at a price per share of $18.9595; 7/20/04 sold
59,444 shares at a price per share of $19.0000. All purchases of Common Stock
referenced above were funded by working capital, which may, at any given time,
include margin loans made by brokerage firms in the ordinary course of business.
The Reporting Entities do not believe that the information contained in this
paragraph is called for by the Items of Schedule 13D and are disclosing it for
supplemental informational purposes only.
Item 4. PURPOSE OF TRANSACTION.
Each of the Reporting Entities acquired beneficial ownership of the shares
of Common Stock to which this Statement relates in order to obtain a significant
equity position in the Company, the Common Stock of which, in the opinion of the
Reporting Entities, is undervalued. The Reporting Entities intend to seek to
meet with the Company's management and Board of Directors to discuss measures to
maximize stockholder value, including, but not limited to, the following:
(a) Initiating the payment of an annual dividend. Given the Company's
demonstrated ability to generate cash from operations, the Reporting
Entities believe that the Company could easily enact an annual
dividend without limiting the ability of the Company to finance its
plans for retail expansion. Many other companies in the footwear
industry pay an annual dividend, including Nike, Reebok, K-Swiss,
Saucony, Wolverine, Stride Rite, Weyco, Brown Shoe and Kenneth Cole.
At the current stock price of roughly $17.50 per share (as of the
date of the filing of the original Statement), a dividend of 2.0%
would translate into annual payments of approximately $4.7 million,
less than 25% of the Company's net income in fiscal year 2003.
(b) Utilizing a portion of the Company's $67.3 million in cash and
marketable securities (as reported in the Company's press release
dated July 27, 2004) to finance the repurchase of Common Stock under
the Company's existing stock repurchase program. While the Company
announced in its July 22, 2004 press release that it had repurchased
85,200 shares of Common Stock during the second quarter of 2004,
this represented, to our knowledge, the only share repurchase
between January 1, 2001 and June 30, 2004. The Reporting Entities
believe that it would be a productive use of the Company's capital
to repurchase the Company's Common Stock more aggressively at
current trading levels.
(c) Moderating the issuance of stock options. As reported in the
Company's Form 10-K for the year ended December 31, 2003, the
Company had 2,274,475 options outstanding as of March 4, 2004, or
approximately 17% of the 13,323,905 total shares outstanding as of
March 9, 2004, as reported in the same Company filing. The Reporting
Entities believe that this percentage is materially higher than that
found at many other footwear companies and are concerned by the fact
that the Company's diluted weighted average common shares
outstanding has increased approximately 9% from fiscal year 2001 to
fiscal year 2003.
(d) Taking action to improve the merchandising strategy of the Company,
particularly with regard to weakness at Madden Women's, l.e.i.,
Madden Men's and Stevies.
(e) Addressing escalating operating expenses, which have increased as a
percentage of sales (relative to the quarter for the prior year) in
each of the last three quarters.
(f) Concurrent with the above measures, exploring strategic discussions
with potential acquirers in order to determine whether the
acquisition value of the Company materially exceeds the current
trading value.
The Reporting Entities consider their equity position to be for investment
purposes. The Reporting Entities may consider seeking to obtain representation
on the Company's Board of Directors in the future.
Each of the Reporting Entities may acquire additional shares or other
securities of the Company or sell or otherwise dispose of any or all of the
shares or other securities of the Company beneficially owned by it. The
Reporting Entities may also take any other action with respect to the Company or
any of its debt or equity securities in any manner permitted by law.
Except as set forth in this Item 4, none of the Reporting Entities have any
present plans or proposals that relate to or would result in any of the actions
specified in clauses (a) through (j) of the instructions to Item 4 of Schedule
13D. The Reporting Entities intend to review their investment in the Issuer on a
continuing basis and attempt to engage in discussions with management and the
Board of Directors of the Issuer concerning the business, operations and future
plans of the Issuer. Depending on various factors including, without limitation,
the willingness of management and the Board of Directors of the Issuer to meet
with the Reporting Entities, the Issuer's financial position and business
strategy, the price levels of the shares of Common Stock, conditions in the
securities markets and general economic and industry conditions, the Reporting
Entities may in the future take such actions with respect to its investment in
the Issuer as it deems appropriate including, without limitation, seeking Board
representation, making proposals to the Issuer concerning changes to the
capitalization, ownership structure or operations of the Issuer, purchasing
additional shares of Common Stock, selling some or all of its shares of Common
Stock, engaging in short selling of or any hedging or similar transaction with
respect to the shares of Common Stock or changing its intention with respect to
any and all matters referred to in Item 4.
On November 5, 2004, James A. Mitarotonda, Chairman and Chief Executive
Officer of Barington Capital LP, sent the letter attached hereto as Exhibit 99.2
to Jamieson A. Karson, the Vice Chairman and Chief Executive Officer of the
Company.
On November 16, 2004, James A. Mitarotonda, Chairman and Chief Executive
Officer of Barington Capital LP, sent the letter attached hereto as Exhibit 99.3
to Jamieson A. Karson, the Vice Chairman and Chief Executive Officer of the
Company. The letter was sent in response to Mr. Karson's letter dated November
9, 2004 in which he declined the request of Mr. Mitarotonda to meet with him and
the Company's Chief Operating Officer and Chief Financial Officer.
On December 13, 2004, James A. Mitarotonda, Chairman and Chief Executive
Officer of Barington Capital LP, sent the letter attached hereto as Exhibit 99.4
to each of the outside members of the Board of Directors of the Company. The
letter was sent in response to Mr. Karson's continued refusal to meet with Mr.
Mitarotonda.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, Barington LP beneficially owns an aggregate of
288,937 shares of Common Stock, representing approximately 2.21% of the shares
of Common Stock presently outstanding based upon based upon the 13,053,505
shares of Common Stock reported by the Company to be issued and outstanding as
of November 3, 2004 in its Form 10-Q filed with the Securities and Exchange
Commission on November 9, 2004 (the "Issued and Outstanding Shares").
As the general partner of Barington LP, Barington Investors LLC may be
deemed to beneficially own the 288,937 shares of Common Stock owned by Barington
LP. As the managing member of Barington Investors LLC, which in turn is the
general partner of Barington LP, Mr. Mitarotonda may be deemed to beneficially
own the 288,937 shares of Common Stock owned by Barington LP, constituting
approximately 2.21% of the Issued and Outstanding Shares.
As of the date hereof, Barington Offshore beneficially owns 48,535 shares
of Common Stock, constituting approximately 0.37% of the Issued and Outstanding
Shares. As the investment advisor to Barington Offshore, Barington Advisors LLC
may be deemed to beneficially own the 48,535 shares of Common Stock owned by
Barington Offshore, constituting approximately 0.37% of the Issued and
Outstanding Shares. As the managing member of Barington Advisors LLC, Barington
Capital LP may be deemed to beneficially own the 48,535 shares of Common Stock
owned by Barington Offshore. As the majority member of Barington Investors LLC,
Barington Capital LP may also be deemed to beneficially own the 288,937 shares
of Common Stock owned by Barington LP, representing an aggregate of 337,472
shares, constituting approximately 2.58% of the Issued and Outstanding Shares.
As the general partner of Barington Capital LP, LNA may be deemed to
beneficially own the 288,937 shares owned by Barington LP and the 48,535 shares
owned by Barington Offshore, representing an aggregate of 337,472 shares,
constituting approximately 2.58% of the Issued and Outstanding Shares. As the
sole stockholder and director of LNA, Mr. Mitarotonda may be deemed to
beneficially own the 288,937 shares owned by Barington LP and the 48,535 shares
owned by Barington Offshore, representing an aggregate of 337,472 shares,
constituting approximately 2.58% of the Issued and Outstanding Shares. Mr.
Mitarotonda has sole voting and dispositive power with respect to the 288,937
shares owned by Barington LP and the 48,535 shares owned by Barington Offshore
by virtue of his authority to vote and dispose of such shares.
As of the date hereof, each of Parche and Starboard beneficially own
105,496 and 553,852 shares of Common Stock, respectively, constituting
approximately 0.81% and 4.24%, respectively, of the Issue and Outstanding
Shares. As the managing member of each of Parche and Starboard, Admiral may be
deemed to beneficially own the 105,496 shares and the 553,852 shares,
respectively, of Common Stock owned by Parche and Starboard, representing an
aggregate of 659,348 shares, constituting approximately 5.05% of the Issued and
Outstanding Shares. As the sole member of Admiral, RCG may be deemed to
beneficially own the 105,496 shares and the 553,852 shares, respectively, of
Common Stock owned by Parche and Starboard, representing an aggregate of 659,348
constituting approximately 5.05% of the Issued and Outstanding Shares. As the
managing member of RCG, C4S may be deemed to beneficially own the 105,496 shares
and the 553,852 shares, respectfully, of Common Stock owned by Parche and
Starboard, representing an aggregate of 659,348 shares, constituting
approximately 5.05% of the Issued and Outstanding Shares. As the managing
members of C4S, each of Peter A. Cohen, Morgan B. Stark, Jeffrey M. Solomon and
Thomas W. Strauss may be deemed to beneficially own the 105,496 shares and the
553,852 shares, respectfully, of Common Stock owned by Parche and Starboard,
representing an aggregate of 659,348 shares, constituting approximately 5.05% of
the Issued and Outstanding Shares. Each of Messrs. Cohen, Stark, Solomon and
Strauss share voting and dispositive power with respect to the 105,496 shares
and 553,852 shares, respectfully, owned by Parche and Starboard by virtue of
their shared authority to vote and dispose of such shares. Messrs. Cohen, Stark,
Soloman & Strauss disclaim beneficial ownership of such shares.
As of the date hereof, RJG LP beneficially owns 8,600 shares of Common
Stock, constituting approximately 0.066% of the Issued and Outstanding Shares.
As the general partner of RJG LP, RJG LLC may be deemed to beneficially own the
8,600 shares owned by RJG LP, constituting approximately 0.066% of the Issued
and Outstanding Shares. As the managing member of RJG LLC, which in turn is the
general partner of RJG LP, Mr. Gross may be deemed to beneficially own the 8,600
shares owned by RJG LP, constituting approximately 0.066% of the Issued and
Outstanding Shares. Mr. Gross has sole voting and dispositive power with respect
to the 8,600 shares owned by RJG LP by virtue of his authority to vote and
dispose of such shares.
(b) Each of the Reporting Entities is deemed to have sole voting and
dispositive power over the shares of Common Stock reported as beneficially owned
by virtue of their respective positions as described in paragraph (a), with the
exception of Messrs. Cohen, Stark, Solomon and Strauss, who have shared
authority to vote and dispose of such shares. Messrs. Cohen, Stark, Soloman &
Strauss disclaim beneficial ownership of such shares. With the exception of
Messrs. Cohen, Stark, Solomon and Strauss, each of the other Reporting Entities
are deemed to have sole voting and dispositive power with respect to the shares
each beneficially owns, regardless of the fact that multiple Reporting Entities
within the same chain of ownership are deemed to have sole voting and
dispositive power with respect to such shares. Each such Reporting Entity
reports sole voting and dispositive power with respect to such shares based on
its relationship to the other Reporting Entities within the same chain of
ownership.
(c) No person identified in Item 2 hereof has effected any transaction in
shares of such Common Stock during the 60 days preceding the date hereof, except
to the extent previously disclosed.
(d) Not applicable.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Barington Capital Group, L.P. or one or more of its affiliates expect to
receive from Starboard Value & Opportunity Fund, LLC and Parche, LLC a fee with
respect to certain profits those entities may derive from their investment in
the Common Stock of the Company. An agreement between the parties with respect
to the foregoing has not yet been formalized.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. 1 Exhibit Description
99.1 Agreement of Joint Filing among Barington Companies Equity Partners,
L.P., Barington Companies Investors, LLC, James Mitarotonda,
Barington Companies Offshore Fund, Ltd., Barington Companies
Advisors, LLC, Barington Capital Group, L.P., LNA Capital Corp.,
Parche, LLC, Admiral Advisors, LLC, Ramius Capital Group, LLC, C4S &
Co., LLC, Peter A. Cohen, Morgan B. Stark, Jeffrey M. Solomon,
Thomas W. Strauss, Starboard Value & Opportunity Fund, LLC, RJG
Capital Partners, LP, RJG Capital Management, LLC and Ronald Gross
dated December 13, 2004.1
99.2 Letter from James A. Mitarotonda of Barington Capital Group, L.P. to
Jamieson A. Karson, Vice Chairman and Chief Executive Officer of
Steven Madden, Ltd., dated November 5, 2004. (Filed as an exhibit to
Amendment No. 1 to the Statement)
99.3 Letter from James A. Mitarotonda of Barington Capital Group, L.P. to
Jamieson A. Karson, Vice Chairman and Chief Executive Officer of
Steven Madden, Ltd., dated November 16, 2004. (Filed as an exhibit
to Amendment No. 2 to the Statement)
--------
1 The Agreement of Joint Filing that was previously filed has been
superseded and replaced by the attached Agreement of Joint Filing, which is in
full force and effect.
99.4 Letter from James A. Mitarotonda of Barington Capital Group, L.P. to
each of the outside members of the Board of Directors of Steven
Madden, Ltd., dated December 13, 2004.
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
Dated: December 13, 2004
BARINGTON COMPANIES EQUITY PARTNERS, L.P.
By: Barington Companies Investors, LLC,
its general partner
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: Managing Member
BARINGTON COMPANIES INVESTORS, LLC
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: Managing Member
/s/ James A. Mitarotonda
----------------------------------------
James A. Mitarotonda
BARINGTON COMPANIES OFFSHORE FUND, LTD. (BVI)
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President
BARINGTON COMPANIES ADVISORS, LLC
By: Barington Capital Group, L.P., its
managing member
By: LNA Capital Corp., its general
partner
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President and Chief Executive Officer
BARINGTON CAPITAL GROUP, L.P.
By: LNA Capital Corp., its general
partner
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President and Chief Executive Officer
LNA CAPITAL CORP.
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President and Chief Executive Officer
PARCHE, LLC
By: Admiral Advisors, LLC, its managing
member
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
STARBOARD VALUE & OPPORTUNITY FUND, LLC
By: Admiral Advisors, LLC, its managing
member
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
ADMIRAL ADVISORS, LLC
By: Ramius Capital Group, LLC, its
sole member
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
RAMIUS CAPITAL GROUP, LLC
By: C4S & Co., its managing member
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Managing Member
C4S & CO., LLC
By: /s/ Jeffrey M. Solomon
------------------------------------
Name: Jeffrey M. Solomon
Title: Managing Member
/s/ Peter A. Cohen
--------------------------------
Peter A. Cohen
/s/ Morgan B. Stark
--------------------------------
Morgan B. Stark
/s/ Jeffrey M. Solomon
--------------------------------
Jeffrey M. Solomon
/s/ Thomas W. Strauss
--------------------------------
Thomas W. Strauss
RJG CAPITAL PARTNERS, LP
By: RJG Capital Management, LLC, its general
partner
By: /s/ Ronald J. Gross
-------------------------------
Name: Ronald J. Gross
Title: Managing Member
RJG CAPITAL MANAGEMENT, LLC
By: /s/ Ronald J. Gross
-------------------------------
Name: Ronald J. Gross
Title: Managing Member
By: /s/ Ronald J. Gross
-------------------------------
Ronald J. Gross
SCHEDULE I
DIRECTORS AND OFFICERS OF BARINGTON COMPANIES OFFSHORE FUND, LTD. (BVI)
NAME AND POSITION PRINCIPAL OCCUPATION PRINCIPAL BUSINESS ADDRESS
James A. Mitarotonda Chairman of Barington 888 Seventh Avenue
Director and President Capital Group, L.P. 17th Floor
New York, NY 10019
Sebastian E. Cassetta Executive Vice President 888 Seventh Avenue
Director and Chief Operating 17th Floor
Officer of Barington New York, NY 10019
Capital Group, L.P.
Edith Conyers General Manager of Forum Washington Mall 1, 3rd Flr.
Director Fund Services, Ltd. 22 Church Street
Hamilton, HM11, Bermuda
Graham Cook Fund Administration Bison Court
Director P.O. Box 3460
Road Town, Tortola
British Virgin Islands
Forum Fund Services, Ltd. Fund Administration Washington Mall 1, 3rd Flr.
Secretary 22 Church Street
Hamilton, HM11, Bermuda
Melvyn Brunt Chief Financial Officer 888 Seventh Avenue
Treasurer of Barington Capital 17th Floor
Group, L.P. New York, NY 10019
OFFICERS OF LNA CAPITAL CORP.
NAME AND POSITION PRINCIPAL OCCUPATION PRINCIPAL BUSINESS ADDRESS
James A. Mitarotonda Chairman of Barington 888 Seventh Avenue
President and Chief Capital Group, L.P. 17th Floor
Executive Officer New York, NY 10019
Sebastian E. Cassetta Executive Vice President 888 Seventh Avenue
Secretary and Chief Operating Officer 17th Floor
of Barington Capital New York, NY 10019
Group, L.P.
Melvyn Brunt Chief Financial Officer of 888 Seventh Avenue
Treasurer Barington Capital 17th Floor
Group, L.P. New York, NY 10019
EXHIBIT 99.1
EXHIBIT 99.1
Agreement of Joint Filing
Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of
1934, as amended, the undersigned persons hereby agree to file with the
Securities and Exchange Commission the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
This Agreement of Joint Filing supersedes and replaces the Agreement of
Joint Filing dated July 30, 2004.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
Dated: December 13, 2004
BARINGTON COMPANIES EQUITY PARTNERS, L.P.
By: Barington Companies Investors, LLC,
its general partner
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: Managing Member
BARINGTON COMPANIES INVESTORS, LLC
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: Managing Member
/s/ James A. Mitarotonda
----------------------------------------
James A. Mitarotonda
BARINGTON COMPANIES OFFSHORE FUND, LTD. (BVI)
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President
BARINGTON COMPANIES ADVISORS, LLC
By: Barington Capital Group, L.P., its
Managing Member
By: LNA Capital Corp., its general
partner
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President and Chief Executive Officer
BARINGTON CAPITAL GROUP, L.P.
By: LNA Capital Corp., its general
partner
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President and Chief Executive Officer
LNA CAPITAL CORP.
By: /s/ James A. Mitarotonda
------------------------------------
Name: James A. Mitarotonda
Title: President and Chief Executive Officer
PARCHE, LLC
By: Admiral Advisors, LLC, its managing
member
By: /s/ Jeffrey M. Solomon
-------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
STARBOARD VALUE & OPPORTUNITY FUND, LLC
By: Admiral Advisors, LLC, its managing
member
By: /s/ Jeffrey M. Solomon
-------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
ADMIRAL ADVISORS, LLC
By: Ramius Capital Group, LLC, its
sole member
By: /s/ Jeffrey M. Solomon
-------------------------------------
Name: Jeffrey M. Solomon
Title: Authorized Signatory
RAMIUS CAPITAL GROUP, LLC
By: C4S & Co., its managing member
By: /s/ Jeffrey M. Solomon
-------------------------------------
Name: Jeffrey M. Solomon
Title: Managing Member
C4S & CO., LLC
By: /s/ Jeffrey M. Solomon
-------------------------------------
Name: Jeffrey M. Solomon
Title: Managing Member
/s/ Peter A. Cohen
--------------------------------
Peter A. Cohen
/s/ Morgan B. Stark
--------------------------------
Morgan B. Stark
/s/ Jeffrey M. Solomon
---------------------------------
Jeffrey M. Solomon
/s/ Thomas W. Strauss
--------------------------------
Thomas W. Strauss
RJG CAPITAL PARTNERS, LP
By: RJG Capital Management, LLC, its general
partner
By: /s/ Ronald J. Gross
-------------------------------
Name: Ronald J. Gross
Title: Managing Member
RJG CAPITAL MANAGEMENT, LLC
By: /s/ Ronald J. Gross
-------------------------------
Name: Ronald J. Gross
Title: Managing Member
/s/ Ronald J. Gross
-----------------------------------
Ronald J. Gross
EXHIBIT 99.4
BARINGTON CAPITAL GROUP, L.P.
888 SEVENTH AVENUE, 17TH FLOOR
NEW YORK, NEW YORK 10019
December 13, 2004
To the Outside Directors of
Steven Madden, Ltd.
52-16 Barnett Avenue
Long Island City, New York 11104
Gentlemen:
As you are aware, Barington Capital Group, L.P. represents a group
of investors that owns an aggregate of 1,005,420 shares, or approximately 7.7
percent of the outstanding common stock of Steven Madden, Ltd. As one of the
largest stockholders of the Company, we have been concerned with the performance
of the Company under the stewardship of Jamieson Karson, its Chairman and Chief
Executive Officer.
We have therefore made numerous requests to meet with Mr. Karson and
his management team in order to understand their vision for the Company and
plans to improve its performance. We also wanted to discuss with them our
perspective on the Company and present constructive measures that we believe
will enhance the profitability and share price performance of the Company for
the benefit of all of its stockholders. Unfortunately, each of our requests has
been refused by Mr. Karson, who has sought to avoid meeting with us by raising
excuses that we view to be nothing more than diversions and smokescreens.
We are disappointed that the Company has chosen to attack us rather
than being receptive to our offer of assistance. The stockholders own the
Company, not Mr. Karson. We believe that as the Company's most senior employee,
he has a duty to listen to the concerns of stockholders. Accordingly, we have no
choice but to express our concerns directly to you, the outside directors of the
Company.
We have conducted a substantial amount of research and analysis to
identify opportunities for the Company in the fashion marketplace as well as
ways to improve management and operations. Our conclusion is that while the
Steve Madden brand remains strong and the Company has the potential to once
again become a growing and highly profitable enterprise, a number of misguided
actions taken by the Company's Board and its inexperienced chief executive have
significantly weakened the Company over the past few years. As a result, we
believe that it is imperative that the Company promptly address the operational,
financial and corporate governance issues outlined below.
THE COMPANY NEEDS A CEO WITH MORE EXTENSIVE INDUSTRY AND MANAGEMENT EXPERIENCE.
Prior to becoming the Company's CEO on July 1, 2001, Jamie Karson
practiced law for more than 17 years. While Mr. Karson may be a trusted
childhood friend of Mr. Steve Madden, he lacks public company management
experience as well as any meaningful design, sales, marketing or brand
development experience in the fashion, footwear or retail industries.
We seriously question Mr. Karson's ability to lead the Company in
its highly competitive industry against larger and more established competitors.
It is our belief that the Company's disappointing operating performance is
related, in part, to Mr. Karson's lack of industry and management experience. We
therefore recommend that the Board immediately commence a search for a more
seasoned CEO to lead the Company with relevant industry and management
experience.
THE COMPANY SHOULD IMMEDIATELY AND AGGRESSIVELY REDUCE OPERATING EXPENSES.
The Company's operating income margin (excluding extraordinary
items) has declined in two of the last three fiscal years. It also declined in
the nine months ended September 30, 2004, decreasing a staggering 400 basis
points relative to the same period in the prior year. Operating expenses as a
percentage of net sales have now increased for four consecutive quarters
(relative to the quarter for the prior year). We see multiple areas where the
Company can reduce operating expenses, including the following:
o COMPENSATION. We believe that the Company's employee compensation
costs are too high, particularly after factoring in bonuses, option
awards, restricted stock awards, expense accounts and other
compensation. We encourage a review of all employees whose total
compensation exceeds $150,000 to determine whether each highly paid
employee's experience and contribution warrants such compensation.
o HEADCOUNT. We believe that the Company has various duplicative
and/or excessive positions. For example, it is our understanding
that at least one of the smaller brands of the Company has its own
Chairman in addition to its own President. We believe that the
potential savings from reducing the Company's compensation structure
and head count range from $1.5 to $5.0 million per annum.
THE COMPANY SHOULD IMPLEMENT A MORE COMPREHENSIVE "PAY FOR PERFORMANCE"
COMPENSATION STRUCTURE.
We believe that the Company needs to modify its compensation
arrangements in order to implement a more comprehensive "pay for performance"
compensation structure. On that note, we are distressed to observe that in 2003
the Company permitted Mr. Karson to be paid $250,000 in cash in lieu of granting
him options to purchase 100,000 shares of common stock as prescribed by the
terms of his employment agreement. (The Company's public filings also reveal
that Mr. Karson has never purchased shares in the Company with his own money.)
What kind of message does this send to employees and stockholders about Mr.
Karson's beliefs in the prospects of the Company? It is no wonder that at least
two other members of the Company's senior management team also opted to receive
cash in lieu of stock options in 2003.
THE COMPANY SHOULD CRITICALLY ASSESS ITS STABLE OF BRANDS AND FOCUS ON ITS CORE
STRENGTHS.
We believe that with seven brands and multiple retail concepts
(Steve Madden retail stores, the internet store and Shoe Biz), management should
avoid the additional distraction of new ventures that it appears ill-prepared to
undertake. Management should also discontinue or license out certain businesses
in order to ensure that its time is spent working on the Company's main brands
and most profitable business lines. We believe that the following areas should
be addressed immediately:
o LICENSING. We believe that the Company should expand the Steve
Madden brand by finding experienced, external licensing partners
rather than exploring in-house efforts. The opportunity that the
Company has missed by failing to fully exploit its brand is clearly
highlighted by the success of Kenneth Cole Productions, Inc., which
has significantly expanded its licensing revenue largely via
external licensing partners. In 1996, Kenneth Cole had licensing
revenue of $3.6 million, roughly comparable to the Company's
licensing revenue of $2.8 million in 2003. Four years later, Kenneth
Cole's licensing revenue had grown to $21.6 million, an increase of
roughly 500 percent.
o ACQUISITIONS. We believe that the Company should not pursue any
acquisitions unless and until the Company's core brands have
returned to historical levels of growth and profitability.
o CHILDREN'S FOOTWEAR. We believe that the Company should license out
the Stevies name, thereby limiting the Company's exposure to the
extremely competitive children's footwear business.
o UNIONBAY. We believe that the Company should acknowledge that
Unionbay is a failed venture and end its license agreement.
o SHOE BIZ. We believe that the Company should assess the Shoe Biz
business in order to determine if it is both a profitable and
efficient use of management's time and the Company's capital.
THE COMPANY SHOULD STRENGTHEN ITS SYSTEMS AND LOGISTICS INFRASTRUCTURE.
We believe that the Company's systems are insufficient and should
more completely inter-link Steve Madden wholesale operations, Steve Madden
retail and internet operations and financial/back office operations. We also
believe that the Company needs a comprehensive and rational logistics policy. In
our opinion, improving systems and logistics would reduce expenses (e.g., lower
manpower, freight and third-party logistics costs) and allow the Company to
better manage its inventory. Improved inventory control is particularly
important given the inventory problems experienced in the quarter ended
September 30, 2004, when inventory increased to $30.4 million from roughly $23.0
million for the quarter ended September 30, 2003.
THE COMPANY SHOULD PROMPTLY IMPROVE ITS CORPORATE GOVERNANCE.
In this age of corporate governance awareness and reform, we are
shocked that the Board has permitted obvious, longstanding conflicts of interest
and related party transactions to exist at the Board level. As there appears to
be a need for considerable improvement in the Company's corporate governance
record, we encourage the Board to promptly take the following actions:
o Take all necessary steps to immediately terminate the related party
transactions between the Company and its directors. Of the Company's
seven directors, one is the CEO, one is the brother of the Company's
founder who receives through his wholly-owned company monthly fees
of $16,000 from the Company, and two others are party (either
directly or indirectly) to substantial six figure related-party
arrangements with the Company. As a result, it appears questionable
whether a majority of the Company's current directors are truly
independent.
o Separate the positions of Chairman and CEO, as these positions are
two distinct jobs with different responsibilities. As the lack of an
independent Chairman can hinder the ability of the Board to
adequately oversee and evaluate the performance of the Company and
its senior officers (including the CEO), we also strongly recommend
that the Board designate an independent Chairman.
o Scale back the excessive "golden parachute" awards contained in a
number of the employment agreements for the Company's executive
officers. For example, Mr. Karson's employment agreement would
provide him with a payout equal to three times his annual salary and
bonus in the event of a change of control of the Company.
o Redeem the Company's "poison pill," which was implemented without
stockholder approval.
THE COMPANY SHOULD USE ITS EXCESS CASH TO AGGRESSIVELY BUY-BACK STOCK AT CURRENT
LEVELS.
In spite of the Company's roughly $68.5 million cash, cash
equivalents and marketable securities position as of September 30, 2004, the
Company does not pay a dividend and has repurchased only $5.2 million worth of
stock between January 1, 2004 and September 30, 2004. Over that same time
period, the Company's share price declined roughly 15 percent. We believe that
the lack of aggressive stock repurchases during the last three fiscal years has
been a mistake and that it is imperative that the Company commence a $30.0
million stock repurchase program at the present time.
We further recommend that the Company institute an annual cash
dividend of $0.35 per share.
THE COMPANY SHOULD MODERATE THE ISSUANCE OF STOCK OPTIONS.
As reported in the Company's Form 10-K for the year ended December
31, 2003, the Company had 2,274,475 options outstanding, which is equivalent to
approximately 17 percent of the Company's shares outstanding as of November 3,
2004. This percentage is significantly higher than its peers. While we encourage
measured issuances of options on a "pay for performance" basis, it appears to us
that the compensation and options packages at Steven Madden, Ltd. are excessive
and have failed to drive performance.
We are hopeful that the Board will consider our recommendations in
good faith and work together with us for the good of all stockholders. To date,
we have only received vitriolic letters from Mr. Karson and the Company's
high-priced attorneys, paid for out of the stockholders' money, seeking to
either intimidate us or divert the attention from the real issue - the Company's
performance. In an attempt to eliminate this waste of resources by the Company,
we would like to take this opportunity to address some of the issues that have
been raised by Mr. Karson and the Company's counsel:
o No allegations of insider trading were ever made against us, despite
what has been suggested by your counsel. While a former director of
two companies in which we invested did call for our trading
activities to be reviewed, after a full investigation by independent
legal counsel retained by a special committee of independent
directors, it was determined that there was no evidence to suggest
that insider trading occurred. Furthermore, the director who called
for the review publicly withdrew all of his prior communications in
a filing with the Securities and Exchange Commission and stated that
he believed that no further action needed to be taken by either
company with respect to the matter.
o Our shares in Steven Madden, Ltd. are not for sale to the Company in
a private sale. We believe that the Company's stock is undervalued
and we wish to benefit along with ALL other stockholders from any
appreciation.
o Although we are confident that our Schedule 13D fully complies with
federal securities laws, we have supplemented our Schedule 13D to
provide additional information that we believe is not required to be
disclosed under the rules in the hope that it will avoid any more
time or resources being expended on your counsel's specious
concerns.
We believe in the potential of Steven Madden, Ltd. and its portfolio
of strong brands. However, it appears that the Company suffers from being run
with a lack of disciplined operational and financial management. It is our hope
that as the outside members of the Board of Directors of Steven Madden, Ltd. you
will promptly address our concerns and deliver results, not words.
As a large stockholder in Steven Madden, Ltd., we are committed to
improving shareholder value for the benefit of all stockholders of the Company
and are available to meet with you to discuss these matters in greater detail.
We look forward to hearing from you.
Sincerely yours,
/s/ James A. Mitarotonda
------------------------
James A. Mitarotonda
* * * * *
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Barington Capital Group, L.P. ("Barington"), together with the other
participants named herein, may make a preliminary filing with the SEC of a proxy
statement and an accompanying WHITE proxy card to be used to solicit votes for
the election of their nominees at the 2005 annual meeting of stockholders of
Steven Madden, Ltd., a Delaware corporation (the "Company"), which has not yet
been scheduled.
IN THE EVENT THAT A DETERMINATION IS MADE TO FILE A PROXY STATEMENT WITH THE
SEC, BARINGTON STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE
PROXY STATEMENT WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY STATEMENT, IF FILED, WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN ANY
SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT, IF FILED, WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS'
PROXY SOLICITOR, MACKENZIE PARTNERS, INC., AT ITS TOLL-FREE NUMBER: 800-322-2885
OR proxy@mackenziepartners.com.
The participants in such potential proxy solicitation are anticipated to be
Barington, Barington Companies Investors, LLC, James Mitarotonda, Barington
Companies Offshore Fund, Ltd. (BVI), Barington Companies Advisors, LLC,
Barington Companies Equity Partners, L.P., LNA Capital Corp., Parche, LLC,
Starboard Value & Opportunity Fund, LLC, Admiral Advisors, LLC, Ramius Capital
Group, LLC, C4S & Co., LLC, Peter A. Cohen, Morgan B. Stark, Jeffrey M. Solomon,
Thomas W. Strauss, RJG Capital Partners, LP, RJG Capital Management, LLC and
Ronald Gross (together, the "Participants").
Information regarding the Participants and their direct or indirect interests is
available in their Amendment No. 3 to Schedule 13D, jointly filed with the SEC
on December 13, 2004.
# # #