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Acquisitions
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acqusitions
Acquisitions
Acquisition of Kurt Geiger
On May 6, 2025 (the “Acquisition Date”), the Company, through its wholly owned subsidiary, SML UK Holding Ltd, completed the acquisition of the entire issued share capital of Mercury Acquisitions Topco Limited (“MATL”) for an aggregate preliminary purchase price of $405,348, which includes cash consideration of $390,453 paid at closing and $14,895 of contingent consideration as described further below, pursuant to the terms of the sale and purchase deed. The purchase price included payments made by the Company for the settlement of MATL’s previously outstanding third-party bank debt and the reimbursement of certain seller-incurred transaction costs, in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The equity interests of MATL were previously held by various institutional shareholders, including the Fifth Cinven Fund, Bain & Company, Inc., and Squam Lake Investors X LP (BGPI), as well as certain management shareholders.
MATL is the ultimate parent company of the Kurt Geiger business (“Kurt Geiger”), which operates primarily in the UK, U.S., and Europe. Kurt Geiger designs and sells footwear and accessories under its own brands – including Kurt Geiger London, KG Kurt Geiger, and Carvela – through retail stores, e-commerce, wholesale partnerships, and operates third party concessions in premium and luxury department stores primarily in the UK. Kurt Geiger was founded in 1963 and is headquartered in London, United Kingdom.
The acquisition aligns with the Company’s strategic objectives of expanding its international footprint, non-footwear categories, and direct-to-consumer business, and the acquisition strengthens the Company's portfolio of brands.
The acquisition was funded through a combination of debt financing and cash on hand. In connection with the debt financing, effective May 6, 2025, the Company amended and restated its original Credit Agreement in its entirety, replacing it with a new term loan facility in the amount of $300,000 and a new revolving credit facility with a total capacity of $250,000. For further information, see Note 15 – Credit Agreement.
As a result of the acquisition, MATL became a wholly-owned subsidiary of the Company. Accordingly, the results of MATL have been included in the Company’s consolidated financial statements since the Acquisition Date. Results of MATL are allocated to the Company’s existing reportable segments based on the sales channel and product category (Wholesale Footwear, Wholesale Accessories/Apparel, Direct-to-Consumer, Licensing) that generated the revenue. For the period beginning with the Acquisition Date and ended June 30, 2025, MATL contributed revenue of $88,016 and had a net loss of $45,724.
Preliminary Purchase Price Allocation
The acquisition was accounted for in accordance with ASC 805. As such, we have applied acquisition accounting, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their estimated acquisition-date fair values. The following table summarizes the Company’s preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the Acquisition Date.
Balance Sheet ClassificationFair Value
Cash and cash equivalents$18,899 
Accounts receivable26,707 
Inventories189,973 
Operating lease right-of-use asset65,711 
Prepaid expenses and other current assets18,169 
Income tax receivable and prepaid income taxes3,350 
Property and equipment, net34,145 
Intangibles, net170,553 
Accounts payable(55,314)
Accrued expenses(31,745)
Income taxes payable(1,770)
Operating leases – current portion(8,603)
Operating leases – long-term portion(68,251)
Deferred tax liabilities(34,464)
Total fair value excluding goodwill327,360 
Goodwill77,988 
Net assets acquired$405,348 
The Company is in the process of completing its purchase price allocation, including valuation of the fair value of contingent purchase consideration and certain assets acquired and liabilities assumed. This includes the fair values of tangible assets, such as inventories, property and equipment, and right-of-use lease assets, and intangible assets, such as trademarks and customer relationships. Accordingly, the purchase price allocation, as shown in the table above, is considered preliminary. The Company expects to obtain the information necessary to finalize the purchase price allocation during the measurement period, not to exceed one year from the Acquisition Date as permitted under ASC 805. Any changes to the preliminary estimates of the fair value during the measurement period will be recorded as adjustments to those assets and liabilities with a corresponding adjustment to goodwill in the period they occur.
Intangible Assets
The components of intangible assets acquired in connection with the acquisition were as follows:
Intangible AssetEstimated
Lives		Amortization
Method		Estimated Fair
Value
TrademarksIndefiniteN/A$117,380 
Customer relationships
15-20 years
Straight-line53,173 
Total intangible assets$170,553 

Goodwill
In connection with the acquisition, the Company recognized $77,988 of goodwill, which represents the excess of the purchase price over the fair values of the net assets acquired and liabilities assumed. Goodwill recognized as part of the acquisition is primarily attributable to expected synergies, the assembled workforce, the expansion of the Company’s international footprint, and opportunities to grow complementary product categories (including handbags). The goodwill arising from this acquisition is not expected to be deductible for income tax purposes. The Company expects that the goodwill will be allocated to its Wholesale Footwear, Wholesale Accessories/Apparel, and Direct-to-Consumer reporting units and is in the process of determining the final allocation, which will be performed in a systematic manner and completed within the measurement period, as permitted under ASC 805.
Transactions Related to the Business Combination
In accordance with ASC 805, the following transactions were identified in connection with the acquisition of MATL.
▪Acquisition-Related Costs: Acquisition-related costs were expensed as incurred. During the six months ended June 30, 2025, the Company recognized $10,252 of such costs, which were related to financial advisory, legal, accounting and other professional fees and were included within operating expenses in the Company’s Condensed Consolidated Statements of Operations.
▪Debt Issuance Costs: As part of the debt financing in connection with the acquisition, the Company incurred $8,954 of debt issuance costs, which were capitalized in accordance with ASC Topic 470, Debt (“ASC 470”). See Note 15 – Credit Agreement for more information.
▪Acquisition-Related Proceeds to Certain Sellers: In connection with the acquisition, the Company paid approximately $38,819 to management sellers and other key employees of the Company. These amounts were determined by the institutional sellers and represented a reallocation of proceeds from institutional sellers to management sellers in excess of their respective pre-acquisition equity ownership. While required to be accounted for as compensation under U.S. GAAP, these amounts do not represent additional cash paid at closing, but rather a recharacterization of a portion of the total proceeds. The Company determined that these payments represent compensation in accordance with ASC Topic 710, Compensation – General (“ASC 710”), rather than purchase consideration. Given the absence of any future service or performance conditions, the Company recognized the full amount within operating expenses in the Company's Condensed Consolidated Statements of Operations during the second quarter of 2025.
▪Deferred Acquisition-Related Proceeds to Certain Sellers: As part of the acquisition, certain management sellers deferred a portion of their proceeds for their equity interests. These deferred payments represent contingent consideration under ASC 805, as payment is contingent upon the achievement of specified EBITA targets in each of the five years following the acquisition. The estimated fair value of the total potential post-closing payments is approximately $14,895, and the arrangement is structured to pay out annually. The Company recognized a liability for the estimated contingent consideration, with $2,979 included in contingent payment liability - current portion and $11,916 included in contingent payment liability - long-term portion on the Company's Condensed Consolidated Balance Sheets. The maximum consideration which can be paid over the consideration period of five years is approximately $16,600 and there are no minimum payments required. See Note 5 – Fair Value Measurements for more information.
▪Transaction Incentive Plan: In connection with the acquisition, the Company implemented a Transaction Incentive Plan (“TIP”) to secure management sellers’ commitment to closing the transaction, encourage the retention of management sellers and other key employees, and incentivize long-term operating performance. Institutional sellers do not participate in the TIP. Under the TIP, each participant was issued six classes of shares (which we refer to as "Growth Shares") in SML UK Holding Ltd, with each class subject to a graded vesting schedule based on the achievement of specified EBITA performance targets over five separate annual measurement periods beginning July 1, 2025 or a cumulative measurement period from July 1, 2025 to June 30, 2030, as well as continued employment through the applicable vesting dates. Any payouts based on the satisfaction of the service and performance conditions will be made following the end of each applicable annual performance period, subject to a review and approval process in accordance with the terms of the TIP. Given the exclusion of institutional sellers from participation and the presence of certain service conditions, the Company determined that the TIP represents compensation for post-combination services, rather than deferred purchase consideration. The Company determined July 1, 2025 to be the grant date for all classes of Growth Shares issued under the TIP, as the award terms were considered fixed by that date. For each class of Growth Shares, the Company will recognize compensation expense on a straight-line basis over the applicable requisite service period. The expense will be based initially on the grant date fair value of the awards and adjusted for subsequent re-measurements of fair value. These costs will be included within operating expenses in the Company’s Condensed Consolidated Statements of Operations beginning in the third quarter of 2025.
Pro Forma Financial Information
The following unaudited pro forma financial information for the three and six months ended June 30, 2025 and 2024 combines the historical results of Steven Madden, Ltd. and Mercury Acquisitions Topco Limited, assuming that the companies were combined as of January 1, 2024. The pro forma financial information includes various adjustments to reflect business combination accounting effects, including depreciation and amortization charges from acquired tangible and intangible assets, interest expense from the debt financing related to funding the acquisition, acquisition-related transaction costs, acquisition-related compensation costs, and tax-related effects. The pro forma financial information, as presented below, is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2024, nor are they indicative of future operating results.
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Total revenue$603,393 $647,360 $1,264,133 $1,314,448 
Net income6,398 21,828 45,664 15,045 
Acquisition of Hosiery Business
In March 2024, the Company acquired the Steve Madden and Betsey Johnson hosiery division ("hosiery business") of Gina Group LLC (“Gina”). Gina has been the exclusive licensee of the hosiery category for Steve Madden and Betsey Johnson brands and such license agreements were terminated in conjunction with the acquisition. The assets of the hosiery business were acquired for cash consideration of $4,259 and the assets acquired included inventories of $2,168, reacquired rights of $1,450, and goodwill of $641. The results of the hosiery business have been included in the consolidated financial statements since the date of acquisition within the Wholesale Accessories/Apparel segment.
These acquisitions were accounted for in accordance with ASC 805, which requires that the total cost of an acquisition be allocated to tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition.
Joint Ventures
Australia Joint Venture
In January 2025, the Company, through its subsidiary, Madden Asia Holding Limited, entered into a joint venture agreement with GFN Two Pty Ltd., a leading distributor of luxury and retail goods in Australia and New Zealand. The Company acquired a 50.1% controlling financial interest in the newly formed entity, SM Fashion Australia Pty Ltd., through a capital contribution of $1,899. The acquisition resulted in the recognition of goodwill of $1,393. This joint venture was formed to expand the distribution of the Company’s products across Australia and New Zealand through wholesale and direct-to-consumer channels. The results of this joint venture are included within the Wholesale Footwear, Wholesale Accessories/Apparel, and Direct-to-Consumer segments.
Malaysia Joint Venture
In January 2025, the Company, through its subsidiary, Madden Asia Holding Limited, entered into an agreement with Envico Enterprise Sdn. Bhd., a leading distributor of luxury and retail goods in Southeast Asia, to acquire an additional 2.0% equity interest in SM Distribution Malaysia Sdn. Bhd. for cash consideration of $5. This joint venture was originally formed in July 2022, at which time the Company held a 49.0% non-controlling interest. With the acquisition of the additional 2.0% interest, the Company holds a 51.0% controlling financial interest and has consolidated the joint venture’s financial results beginning in the first quarter of 2025. The acquisition resulted in the recognition of goodwill of $1,829. This joint venture engages in the distribution of the Company's products across Malaysia through the direct-to-consumer channel. The results of this joint venture are included within the Direct-to-Consumer segment.
SM Distribution Latin America S. de R.L
In June 2024, the Company, through its subsidiary, Madden Asia Holding Limited, formed a joint venture ("SM Distribution Latin America S. de R.L.") with Steve International Inc. SM Distribution Latin America S. de R.L. is the exclusive distributor of the Company's products in various countries throughout Latin America. In connection with the transaction, the Company acquired a 51.0% controlling financial interest in SM Distribution Latin America S. de R.L. through a contribution of $4,131. Since the date of acquisition, the Company has consolidated SM Distribution Latin America S. de R.L. into its financial results in accordance with ASC Topic 810 “Consolidation” ("ASC 810"). The other member's interest is reflected in net income attributable to noncontrolling interests in the Company's Condensed Consolidated Statements of Operations and noncontrolling interests on the Company's Condensed Consolidated Balance Sheets.
SM Fashion d.o.o. Beograd
In May 2024, the Company, through its subsidiary, Madden Europe Holding BV, formed a joint venture ("SM Fashion d.o.o. Beograd") with Milija Babovic, the exclusive distributor of the Company's products in various countries throughout Southeastern Europe. In connection with the transaction, the Company acquired 50.01% controlling financial interest in SM Fashion d.o.o. Beograd and paid a nominal contribution. Since the date of acquisition, the Company has consolidated SM Fashion d.o.o. Beograd into its financial results in accordance with ASC 810. The other member's interest is reflected in net income attributable to noncontrolling interests in the Company's Condensed Consolidated Statements of Operations and noncontrolling interests on the Company's Condensed Consolidated Balance Sheets.