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Acquisitions and Joint Ventures | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisitions and Joint Ventures | Note 3 – Acquisitions and Joint Ventures 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 $403,348, which includes cash consideration of $390,453 paid at closing and $12,895 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 three months ended September 30, 2025 and the nine month period beginning with the Acquisition Date and ended September 30, 2025, MATL contributed revenue of $135,493 and $223,509, respectively, and had net loss of $15,320 and $61,576, respectively. 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 Classification |  | Fair Value
Cash and cash equivalents |  | $ | 18,899 |
Accounts receivable |  | 29,904 |
Inventories |  | 182,895 |
Operating lease right-of-use asset |  | 65,714 |
Prepaid expenses and other current assets |  | 14,972 |
Income tax receivable and prepaid income taxes |  | 3,350 |
Property and equipment, net |  | 39,320 |
Intangibles, net |  | 165,568 |
Accounts payable |  | (51,249) |
Accrued expenses |  | (35,811) |
Income taxes payable |  | (1,770) |
Operating leases – current portion |  | (8,603) |
Operating leases – long-term portion |  | (68,251) |
Deferred tax liabilities |  | (35,757) |
Total fair value excluding goodwill |  | 319,181 |
Goodwill |  | 84,167 |
Net assets acquired |  | $ | 403,348 |
The Company is in the process of completing its purchase price allocation. 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 Kurt Geiger acquisition were as follows:
Intangible Asset |  | Estimated Lives |  | Amortization Method |  | Estimated Fair Value
Trademark |  | Indefinite |  | N/A |  | $ | 114,987 |
Customer relationships |  | 15-20 years |  | Straight-line |  | 50,581 |
Total intangible assets |  |  |  |  |  | $ | 165,568 |
Goodwill In connection with the Kurt Geiger acquisition, the Company recognized $84,167 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. 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 one-year 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 Kurt Geiger. ▪Acquisition-Related Costs: Acquisition-related costs were expensed as incurred. During the three and nine months ended September 30, 2025, the Company recognized $325 and $10,726 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 $12,895, and the arrangement is structured to pay out annually. The Company recognized a liability for the estimated contingent consideration, with $3,221 included in contingent payment liability - current portion and $9,674 included in contingent payment liability - long-term portion on the Company's Condensed Consolidated Balance Sheets as of the Acquisition Date. There was no change in fair value of the contingent consideration as of and for the year ended September 30, 2025. 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 and a cumulative measurement period from July 1, 2025 to June 30, 2030, with certain conditions tied to continued employment through the applicable vesting dates. Any payouts based on the satisfaction of the performance and service 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. See Note 10 – Share-Based Compensation for further information. Pro Forma Financial Information The following unaudited pro forma financial information for the three and nine months ended September 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 September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Total revenue |  | $ | 668,109 |  |  | $ | 750,683 |  |  | $ | 1,931,959 |  |  | $ | 2,065,069 |
Net income |  | 42,469 |  |  | 53,101 |  |  | 89,408 |  |  | 67,351 |
Acquisition of Hosiery Business In March 2024, the Company acquired the Steve Madden and Betsey Johnson hosiery divisions ("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 Greater China Joint Venture In August 2025, the Company, through its subsidiary, Madden Asia Holding Limited, entered into a joint venture agreement with Glamear Trading Limited, a leading distributor of luxury and retail goods in the Greater China region. The Company acquired a 50% controlling financial interest in the newly formed entity, MG Distribution Hong Kong Limited, through a capital contribution of $3,500. This joint venture was formed to expand the distribution of the Company’s products across China, Hong Kong, and Macau. The results of this joint venture are included within the Direct-to-Consumer segment. 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 now 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 results of this joint venture are included within the Wholesale Footwear and Direct-to-Consumer segments. 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 results of this joint venture are included within the Wholesale Footwear and Direct-to-Consumer segments. Divestitures Divestiture of GREATS® Business On August 13, 2024, the Company completed the sale of substantially all of the assets and liabilities related to one of its subsidiaries, Greats Brand Inc. ("GREATS®"), to an unrelated third party, Unified Commerce Group Ltd. ("UCG"), in exchange for a minority interest in UCG with an estimated fair value of approximately $4,020. The Company determined that GREATS® met the definition of a business under ASC 805, Business Combinations. The transaction resulted in the deconsolidation of GREATS® from the Company’s consolidated financial statements and the recognition of a loss on sale in the amount of $3,199, which was included within operating expenses in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024. Prior to the divestiture, GREATS® was primarily part of our Direct-to-Consumer segment. The Company determined that its minority interest in UCG does not give the Company significant influence over UCG. Consequently, the Company accounted for the investment under ASC 321, Investments – Equity Securities, and elected to apply the measurement alternative, which allows the Company to initially record the investment at cost and subsequently remeasure the investment at fair value upon observable price changes in orderly transactions for the identical or a similar investment of the same issuer or impairment, if any. The investment was included within deposits and other on our Condensed Consolidated Balance Sheet as of September 30, 2025.

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