10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to _____________________

Commission File Number 0-23702

STEVEN MADDEN, LTD.

(Exact name of registrant as specified in its charter) 

Delaware	13-3588231
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

52-16 Barnett Avenue, Long Island City, New York	11104
(Address of principal executive offices)	(Zip Code)

(718) 446-1800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesx   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesx   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o (do not check if smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso   No x

As of November 5, 2012, the latest practicable date, there were 45,909,160 shares of the registrant’s common stock, $.0001 par value, outstanding.

STEVEN MADDEN, LTD.

FORM 10-Q

QUARTERLY REPORT

September 30, 2012

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements - Unaudited	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	31
PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	31
ITEM 6.	Exhibits	33
	Signatures	34

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

	September 30, 2012			December 31, 2011			September 30, 2011
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	64,927		$	102,830		$	35,141
Accounts receivable, net of allowances of $6,149, $5,894 and $7,114	88,150			91,407			113,461
Due from factor, net of allowances of $14,319, $12,325 and $12,496	156,922			62,017			105,694
Inventories	84,044			59,644			77,042
Marketable securities – available for sale	9,964			5,659			4,159
Prepaid expenses and other current assets	21,125			15,289			14,465
Deferred taxes	9,746			9,711			9,415
Total current assets	434,878			346,557			359,377
Notes receivable	3,585			7,401			7,318
Note receivable – related party	3,561			4,090			4,028
Property and equipment, net	43,497			31,587			30,400
Deferred taxes	—			2,428			4,665
Deposits and other	2,264			1,257			1,970
Marketable securities – available for sale	79,464			72,004			72,500
Goodwill – net	91,559			75,595			74,976
Intangibles – net	136,500			98,867			95,780
Total Assets	$	795,308		$	639,786		$	651,014
LIABILITIES
Current liabilities:
Accounts payable	$	96,725		$	69,747		$	86,894
Accrued expenses	38,411			34,327			34,864
Income taxes payable	—			—			22,877
Contingent payment liability – current portion	19,255			14,133			3,787
Accrued incentive compensation	6,290			16,881			13,402
Total current liabilities	160,681			135,088			161,824
Contingent payment liability	38,496			23,788			36,236
Deferred rent	7,207			6,004			5,799
Deferred taxes	2,447			—			—
Other liabilities	123			148			154
Total Liabilities	208,954			165,028			204,013
Commitments, contingencies and other
STOCKHOLDERS’ EQUITY
Preferred stock – $.0001 par value, 5,000 shares authorized; none issued; Series A Junior Participating preferred stock – $.0001 par value, 60 shares authorized; none issued	—			—			—
Common stock – $.0001 par value, 60,000 shares authorized, 54,307, 51,408 and 51,271 shares issued, 45,904, 43,005 and 42,868 shares outstanding	5			5			5
Additional paid-in capital	210,274			186,325			182,292
Retained earnings	507,074			420,411			396,639
Other comprehensive income	1,697			678			740
Treasury stock – 8,403 shares at cost	(132,543		)	(132,543		)	(132,543		)
Total Steven Madden, Ltd. stockholders’ equity	586,507			474,876			447,133
Noncontrolling interests	(153		)	(118		)	(132		)
Total stockholders’ equity	586,354			474,758			447,001
Total Liabilities and Stockholders’ Equity	$	795,308		$	639,786		$	651,014

See accompanying notes to condensed consolidated financial statements unaudited.

1

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net sales	$	356,883		$	313,887		$	911,545		$	688,794
Cost of sales	225,668			204,434			579,983			426,114
Gross profit	131,215			109,453			331,562			262,680
Commission and licensing fee income – net	3,875			5,649			12,600			14,648
Operating expenses	(73,573		)	(64,594		)	(205,482		)	(162,177		)
Impairment charges and provision for litigation	(5,144		)	—			(9,454		)	—
Income from operations	56,373			50,508			129,226			115,151
Interest and other income – net	2,138			1,732			4,271			4,905
Income before provision for income taxes	58,511			52,240			133,497			120,056
Provision for income taxes	20,698			20,372			46,869			46,641
Net income	37,813			31,868			86,628			73,415
Net loss attributable to noncontrolling interests	(83		)	(43		)	(35		)	(132		)
Net income attributable to Steven Madden, Ltd.	$	37,896		$	31,911		$	86,663		$	73,547
Basic net income per share	$	0.88		$	0.75		$	2.02		$	1.74
Diluted net income per share	$	0.86		$	0.74		$	1.97		$	1.70
Basic weighted average common shares outstanding	43,131			42,430			42,936			42,180
Effect of dilutive securities – options/restricted stock	1,106			977			1,085			973
Diluted weighted average common shares outstanding	44,237			43,407			44,021			43,153

See accompanying notes to condensed consolidated financial statements - unaudited.

2

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income	$	37,813		$	31,868		$	86,628		$	73,415
Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustment	160			—			67			—
Unrealized gain (loss) on marketable securities	506			(644		)	952			(232		)
Total other comprehensive income (loss) (net of tax)	666			(644		)	1,019			(232		)
Comprehensive income	38,479			31,224			87,647			73,183
Comprehensive (loss) income attributable to noncontrolling interests	(83		)	(43		)	(35		)	(132		)
Comprehensive income attributable to Steven Madden, Ltd.	$	38,562		$	31,267		$	87,682		$	73,315

See accompanying notes to condensed consolidated financial statements - unaudited. 

3

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	86,628		$	73,415
Adjustments to reconcile net income to net cash provided by operating activities:
Tax benefit from the exercise of options	(4,298		)	(4,178		)
Depreciation and amortization	9,104			7,849
Loss on disposal of fixed assets	175			609
Impairment charges	6,955			—
Stock-based compensation	12,660			8,337
Provision for doubtful accounts and chargebacks	2,249			4,352
Accrued interest on note receivable – related party	529			(179		)
Deferred rent expense	1,264			(556		)
Realized gain on sale of marketable securities	(2,029		)	(1,254		)
Changes in:
Accounts receivable	5,496			(40,030		)
Due from factor	(96,899		)	(53,184		)
Inventories	(22,180		)	(25,301		)
Prepaid expenses, deposits and other assets	(5,792		)	(2,329		)
Accounts payable and other accrued expenses	20,896			39,834
Net cash provided by operating activities	14,758			7,385
Cash flows from investing activities:
Purchases of property and equipment	(15,617		)	(12,246		)
Purchases of marketable securities	(48,955		)	(13,983		)
Advance to seller of SM Canada	(3,085		)	—
Payment of contingent liability	(7,076		)	—
Sale of marketable securities	40,150			64,885
Acquisitions, net of cash acquired	(29,367		)	(85,234		)
Net cash used in investing activities	(63,950		)	(46,578		)
Cash flows from financing activities:
Proceeds from exercise of stock options	6,991			4,005
Tax benefit from the exercise of options	4,298			4,178
Net cash provided by financing activities	11,289			8,183
Net decrease in cash and cash equivalents	(37,903		)	(31,010		)
Cash and cash equivalents – beginning of period	102,830			66,151
Cash and cash equivalents – end of period	$	64,927		$	35,141

See accompanying notes to condensed consolidated financial statements - unaudited. 

4

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note A – Basis of Reporting

The accompanying unaudited condensed consolidated financial statements of Steven Madden, Ltd. and subsidiaries (the “Company”) have been prepared in accordance with the generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of its operations for the three- and nine-month periods ended September 30, 2012 are not necessarily indicative of the operating results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and related disclosures for the year ended December 31, 2011 included in the Annual Report of Steven Madden, Ltd. on Form 10-K filed with the SEC on February 29, 2012.

Note B – Recently Adopted Accounting Standards

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-08, “Intangibles – Goodwill and Other” (“ASU 2011-08”). Under ASU 2011-08, when testing goodwill for impairment, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If an entity believes, as a result of its qualitative assessment that the fair value of a reporting unit is less than its carrying amount, performing the current two-step impairment test is not required. The guidance also includes a number of events and circumstances that an entity should consider in conducting the qualitative assessment. The adoption of this guidance, which became effective for the Company on January 1, 2012, did not have a material impact on our financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). Under ASU No. 2011-05, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of which option is selected, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU No. 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-05 which became effective for the Company on January 1, 2012, only affected the presentation of financial statements and thus had no impact on the financial results or financial position. In October 2011, the FASB announced plans to defer the presentation of items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income.

Note C – Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Significant areas involving management estimates include allowances for bad debts, returns and customer chargebacks and contingent payment liability. The Company provides reserves on trade accounts receivables and due from factors for future customer chargebacks and markdown allowances, discounts, returns and other miscellaneous compliance related deductions that relate to the current period sales. The Company evaluates anticipated chargebacks by reviewing several performance indicators of its major customers. These performance indicators, which include retailers’ inventory levels, sell-through rates and gross margin levels, are analyzed by management to estimate the amount of the anticipated customer allowance.

5

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note D – Due From Factor

The Company has a collection agency agreement with Rosenthal & Rosenthal, Inc. (“Rosenthal”) that became effective on September 15, 2009. The agreement can be terminated by the Company or Rosenthal at any time upon 60 days prior written notice. Under the agreement the Company can request advances from Rosenthal of up to 85% of aggregate receivables submitted to Rosenthal. The agreement provides the Company with a $30 million credit facility with a $15 million sub-limit for letters of credit at an interest rate based, at the Company’s election, upon either the prime rate or LIBOR. The Company also pays a fee based on a percentage of the gross invoice amount submitted to Rosenthal. Originally the fee was 0.275% of the gross invoice amount but, on July 10, 2012 the agreement was amended to reduce the fee to 0.25%. Rosenthal assumes the credit risk on a substantial portion of the receivables that the Company submits to it and, to the extent of any loans made to the Company, Rosenthal maintains a lien on all of the Company’s receivables to secure the Company’s obligations.

Note E – Notes Receivable

As of September 30, 2012 and December 31, 2011, Notes Receivable were comprised of the following: 

	September 30, 2012		December 31, 2011
Due from Bakers Footwear Group, Inc.	$	—	$	4,092
Due from Betsey Johnson LLC	500		3,309
Due from seller of SM Canada (see Note Q)	3,085		—
Total	$	3,585	$	7,401

On August 26, 2010, the Company entered into a Debenture and Stock Purchase Agreement with Bakers Footwear Group, Inc. (“Bakers”) pursuant to which the Company paid $5,000 to acquire a subordinated debenture in the principal amount of $5,000 and 1,844,860 unregistered shares of Bakers common stock which traded on the Over-the-Counter Bulletin Board. The Company allocated $996 of the purchase price to the common stock and $4,004 to the subordinated debenture based upon their relative fair values. Interest accrues on the debenture at the rate of 11% per annum and is payable quarterly in cash. The principal amount of the debenture was payable by Bakers in four equal installments of $1,250 due on August 31, 2017, 2018, 2019 and 2020. The difference between the $4,004 purchase price of the debenture and the $5,000 principal amount of the debenture is considered original issue discount and is being amortized over the life of the debenture. As of September 30, 2012 and 2011, the total amount of the discount amortized was $145 and $70, bringing the value of the note to$4,148 and $4,074, respectively. On October 3, 2012, Bakers filed for Chapter 11 protection in the United States Bankruptcy Court. As a consequence of the bankruptcy, the debenture due from Bakers (as well as the common stock) is considered impaired and, therefore, was deemed to have no value. (See also Note H.) Accordingly, a charge of $4,148 (as well as a charge of $996 for the impairment of Bakers common stock) was included in the impairment charges and provision for litigation for the Condensed Consolidated Statements of Income in the quarter ended September 30, 2012.

In April 2012, Betsey Johnson LLC filed for Chapter 11 protection in the United States Bankruptcy Court. Shortly thereafter, Betsey Johnson LLC announced that it would commence an orderly liquidation of all of its assets. As a consequence of the bankruptcy, the note receivable due from Betsey Johnson LLC is considered impaired, and accordingly, the value of the note was reduced by $1,810 to $500 in the second quarter of 2012. The $1,810 charge was included in the impairment of charges and provision for litigation in the Condensed Consolidated Statements of Income in the second quarter of this year. The note was valued using the estimated future recoveries from the bankruptcy proceeding.

Note F – Note Receivable – Related Party

On June 25, 2007, the Company made a loan to Steve Madden, its Creative and Design Chief and a principal stockholder of the Company, in the amount of $3,000 in order for Mr. Madden to satisfy a personal tax obligation resulting from the exercise of options that were due to expire and retain the underlying Company common stock, which he pledged to the Company as collateral to secure the loan. Mr. Madden executed a secured promissory note in favor of the Company bearing interest at an annual rate of 8%, which was due on the earlier of the date Mr. Madden ceases to be employed by the Company or December 31, 2007. The note was amended and restated as of December 19, 2007 to extend the maturity date to March 31, 2009, and amended and restated

6

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note F – Note Receivable – Related Party (continued)

again as of April 1, 2009 to change the interest rate to 6% and extend the maturity date to June 30, 2015 at which time all principal and accrued interest would become due. On January 3, 2012, in connection with an amendment of Mr. Madden’s employment contract, the note was again amended and restated (the “Third Amended and Restated Note”) to extend the maturity date to December 31, 2023 and eliminate accrual of interest after December 31, 2011. In addition, the Third Amended and Restated Note provides that, commencing on December 31, 2014 and annually on each December 31 thereafter through the maturity date, one-tenth of the principal amount thereof, together with accrued interest, will be cancelled by the Company provided that Mr. Madden

continues to be employed by the Company on each such December 31. As of December 31, 2011, $1,090 of interest has accrued on the principal amount of the loan related to the period prior to the elimination of the accrual of interest and has been reflected on the Company’s Condensed Consolidated Financial Statements. Due to the three-for-two stock split effected on May 3, 2010, the number of shares securing the loan increased from 510,000 shares to 765,000 shares. Based upon the increase in the market value of the Company’s common stock since the inception of the loan, on July 12, 2010, the Company released from its security interest 555,000 shares of the Company’s common stock, retaining 210,000 shares with a total market value on that date of $6,798, as collateral for the loan. Subsequently, pursuant to the three-for-two stock split effected on May 31, 2011, the number of shares securing the repayment of the loan has increased from 210,000 shares to 315,000 shares. On September 30, 2012, the total market value of these shares was $13,772. Pursuant to the elimination of further interest accumulation under the Third Amended and Restated Note, the outstanding principal and the accrued interest as of December 31, 2011 has been discounted to reflect imputed interest, which will be amortized over the remaining life of the loan.

Note G – Marketable Securities

Marketable securities consist primarily of corporate bonds with maturities greater than three months and up to ten years at the time of purchase as well as marketable equity securities. These securities, which are classified as available-for-sale, are carried at fair value, with unrealized gains and losses, net of any tax effect, reported in stockholders’ equity as accumulated other comprehensive income (loss). These securities are classified as current and non-current marketable securities based upon their maturities. Amortization of premiums and discounts is included in interest income. For the three- and nine-month periods ended September 30, 2012, the amortization of bond premiums totals $182 and $710, respectively, compared to $234 and $898, respectively, for the comparable periods in 2011. The values of these securities may fluctuate as a result of changes in equity values, market interest rates and credit risk.

Note H – Fair Value Measurement

The accounting guidance under “Fair Value Measurements and Disclosures” (“ASC 820-10”) requires the Company to make disclosures about the fair value of certain of its assets and liabilities. ASC 820-10 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. ASC 820-10 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. A brief description of those three levels is as follows:

• Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

• Level 3: Significant unobservable inputs.

The Company’s financial assets and liabilities subject to fair value measurements as of September 30, 2012 and December 31, 2011 are as follows: 

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STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note H – Fair Value Measurement (continued)

			September 30, 2012
			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	5,492	$	5,492	$	—	$	—
Current marketable securities – available for sale	9,964		9,964		—		—
Investment in Bakers	—		—		—		—
Note receivable – related party	3,561		—		—		3,561
Note receivable – Bakers	—		—		—		—
Note receivable – Betsey Johnson	500		—		—		500
Note receivable – Seller of SM Canada	3,085		—		—		3,085
Long-term marketable securities – available for sale	79,464		79,464		—		—
Total assets	$	102,066	$	94,920	$	—	$	7,146
Liabilities:
Contingent consideration	$	57,751	—		—		$	57,751
Total liabilities	$	57,751	—		—		$	57,751

			December 31, 2011
			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	57,652	$	57,652	$	—	$	—
Current marketable securities – available for sale	5,659		5,659		—		—
Investment in Bakers	996		—		996		—
Note receivable – related party	4,090		—		—		4,090
Note receivable – Bakers	4,092		—		—		4,092
Note receivable – Betsey Johnson	3,309		—		—		3,309
Long-term marketable securities – available for sale	72,004		72,004		—		—
Total assets	$	147,802	$	135,315	$	996	$	11,491
Liabilities:
Contingent consideration	$	37,921	—		—		$	37,921
Total liabilities	$	37,921	—		—		$	37,921

8

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note H – Fair Value Measurement (continued)

Pursuant to the Debenture and Stock Purchase Agreement with Bakers (see Note E), the Company acquired 1,844,860 unregistered shares of Bakers common stock, which trades on the OTC Bulletin Board. These shares, which are thinly traded, were valued using the quoted price of similar registered shares of Bakers common stock adjusted for the effect of the transfer restriction, considering factors such as the nature and duration of the transfer restriction, the volatility of the stock and the risk free interest rate. The shares are included in deposits and other assets on the Company’s Condensed Consolidated Balance Sheets. For the note receivable due from Bakers (see Note E), which was purchased at a substantial discount, the carrying value was determined to be the fair value. On October 3, 2012, Bakers filed for Chapter 11 protection in the United States Bankruptcy Court. As a consequence of the bankruptcy, Bakers common stock and the debenture, as well as account receivable due from Bakers, which had been valued at $996, $4,148 and $852, respectively, are considered impaired, and therefore were deemed to have no value. Accordingly, charges of $996 and $4,148 were included in the impairment charges and provision for litigation and a charge of $852 was included in commission and licensing fee income in the Condensed Consolidated Statements of Income for the third quarter of this year.

For the note receivable due from related party and due from the sellers of SM Canada (see Note Q), the carrying value was determined to be the fair value, based upon their imputed or actual interest rates, which approximate current market interest rates. In April 2012, Betsey Johnson LLC announced that it would commence an orderly liquidation under the protection of the United States Bankruptcy Court. The note receivable due from Betsey Johnson was valued using the estimated future recoveries from the bankruptcy proceeding.

The Company has recorded a liability for potential contingent consideration in connection with the February 21, 2012 acquisition of SM Canada (see Note Q). Pursuant to the terms of an earn-out agreement between the Company and the seller of SM Canada, earn-out payments will be due annually to the seller of SM Canada based on the financial performance of SM Canada for each of the twelve-month periods ending on March 31, 2013 through 2017, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of SM Canada during the earn-out period.

The Company has recorded a liability for potential contingent consideration in connection with the May 25, 2011 acquisition of Cejon Inc., Cejon Accessories, Inc. and New East Designs, LLC (collectively "Cejon") (see Note Q). Pursuant to the terms of an earn-out agreement between the Company and the sellers of Cejon, earn-out payments will be made annually to the sellers of Cejon, based on the financial performance of Cejon for each of the twelve-month periods ending on June 30, 2012 through 2016, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Cejon during the earn-out period. The earn-out payment for the period ended June 30, 2012 was paid in the third quarter of this year.

The Company has recorded a liability for potential contingent consideration in connection with the May 20, 2011 acquisition of The Topline Corporation ("Topline") (see Note Q). Pursuant to the terms of the acquisition agreement, an earn-out payment will be made to the seller of Topline based on the financial performance of Topline for the twelve-month period ended June 30, 2012. The fair value of the contingent payment was estimated using the present value of management’s projections of the financial results of Topline during the earn-out period.

The Company has recorded a liability for contingent consideration as a result of the February 10, 2010 acquisition of Big Buddha, Inc. The contingent consideration will be payable to the seller of Big Buddha based on the financial performance of Big Buddha for the twelve-month period ending on March 31, 2013. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Big Buddha during the earn-out period.

Accounting guidance permits entities to choose to measure financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The accounting guidance also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that chose different measurement attributes for similar assets and liabilities. The Company has elected not to measure any eligible items at fair value.

The carrying value of certain financial instruments such as accounts receivable, due from factor and accounts payable approximates their fair values due to the short-term nature of their underlying terms. The fair values of investment in marketable securities available for sale are determined by reference to market data and other valuation techniques, as appropriate. Fair value of the notes receivable held by the Company approximates their carrying value based upon their imputed or actual interest rate, which approximates current market interest rates.

9

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note I – Inventories

Inventories, which consist of finished goods on hand and in transit, are stated at the lower of cost (first-in, first-out method) or market.

Note J – Revenue Recognition

The Company recognizes revenue on wholesale sales when products are shipped pursuant to its standard terms, which are freight on board (“FOB”) Company warehouse, or when products are delivered to the consolidators, or any other destination, as per the terms of the customers’ purchase order, persuasive evidence of an arrangement exists, the price is fixed or determinable and collection is reasonably assured. Sales reductions on wholesale sales for anticipated discounts, allowances and other deductions are recognized during the period when sales are recorded. Customers retain the right to replacement of the product for poor quality or improper or short shipments, which have historically been immaterial. Retail sales are recognized when the payment is received from customers and are recorded net of estimated returns. The Company also generates commission income acting as a buying agent by arranging to manufacture private label shoes to the specifications of its clients. The Company’s commission revenue includes fees charged for its design, product and development services provided to certain suppliers in connection with the Company’s private label business. Commission revenue and product and development fees are recognized as earned when title to the product transfers from the manufacturer to the customer and collections are reasonably assured and are reported on a net basis after deducting related operating expenses.

The Company licenses its Steve Madden® and Steven by Steve Madden® trademarks for use in connection with the manufacture, marketing and sale of sunglasses, eyewear, outerwear, bedding, hosiery and sleepwear. In addition, the Company licenses the Betsey Johnson® trademarks for use in connection with the manufacture, marketing and sale of sleepwear, jewelry, swimwear, eyewear, watches, fragrances, outerwear and luggage. The license agreements require the licensee to pay the Company a royalty and, in substantially all of the agreements, an advertising fee based on the higher of a minimum or a net sales percentage as defined in the various agreements. In addition, under the terms of retail selling agreements, most of the Company’s international distributors are required to pay the Company a royalty based on a percentage of net sales, in addition to a commission and a design fee on the purchases of the Company’s products. Licensing revenue is recognized on the basis of net sales reported by the licensees, or the minimum guaranteed royalties, if higher. In substantially all of the Company’s license agreements, the minimum guaranteed royalty is earned and payable on a quarterly basis.

Note K – Taxes Collected From Customers

The Company accounts for certain taxes collected from its customers in accordance with the accounting guidance which permits companies to adopt a policy of presenting taxes in the income statement on either a gross basis (included in revenues and costs) or a net basis (excluded from revenues). Taxes within the scope of this accounting guidance would include taxes that are imposed on a revenue transaction between a seller and a customer, for example, sales taxes, use taxes, value-added taxes and some types of excise taxes. The Company has consistently recorded all taxes on a net basis.

Note L – Sales Deductions

The Company supports retailers’ initiatives to maximize sales of the Company’s products on the retail floor by subsidizing the co-op advertising programs of such retailers, providing them with inventory markdown allowances and participating in various other marketing initiatives of its major customers. In addition, the Company accepts returns for damaged products for which the Company’s costs are normally charged back to the responsible third-party factory. Such expenses are reflected in the financial statements as deductions to net sales.

10

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note M – Cost of Sales

All costs incurred to bring finished products to the Company’s distribution center or to the customers’ freight forwarder and, in the Retail segment, the costs to bring products to the Company’s stores, are included in the cost of sales line on the Condensed Consolidated Statements of Income. These include the cost of finished products, purchase commissions, letter of credit fees, brokerage fees, sample expenses, custom duty, inbound freight, royalty payments on licensed products, labels and product packaging. All warehouse and distribution costs related to the Wholesale segments and freight to customers, if any, are included in the operating expenses line item of the Company’s Condensed Consolidated Statements of Income. The Company’s gross margins may not be comparable to those of other companies in the industry because some companies may include warehouse and distribution costs, as well as other costs excluded from cost of sales by the Company, as a component of cost of sales, while other companies report on the same basis as the Company and include them in operating expenses.

Note N – Income Taxes

During the second quarter of 2012, the Company determined to invest indefinitely a portion of its 2012 earnings from its foreign operations in the acquisition and expansion of SM Canada. As a result of this investment, the Company's effective income tax rate decreased to 35.4% and 35.1% for the three and nine months ended September 30, 2012, respectively.

Note O – Net Income Per Share of Common Stock

Basic net income per share is based on the weighted average number of shares of common stock outstanding during the period, which does not include unvested restricted stock subject to forfeiture. Diluted net income per share reflects: a) the potential dilution assuming shares of common stock were issued upon the exercise of outstanding in-the-money options and the proceeds thereof were used to purchase shares of the Company’s common stock at the average market price during the period, and b) the vesting of granted nonvested restricted stock awards for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost not yet recognized attributable to future services using the treasury stock method, to the extent dilutive. For both the three- and nine-month periods ended September 30, 2012, options to purchase approximately 99,000 shares of common stock have been excluded in the calculation of diluted income per share as compared with 19,000 and 169,000 shares that were excluded for the three- and nine-month periods ended September 30, 2011, respectively, as the result would have been antidilutive. For the three- and nine-month periods ended September 30, 2012 and 2011, all unvested restricted stock awards were dilutive.

Note P – Stock-Based Compensation

In March 2006, the Board of Directors approved the Steven Madden, Ltd. 2006 Stock Incentive Plan (the “Plan”) under which nonqualified stock options, stock appreciation rights, performance shares, restricted stock, other stock-based awards and performance-based cash awards may be granted to employees, consultants and non-employee directors. The stockholders approved the Plan on May 26, 2006. On May 25, 2007, the stockholders approved an amendment to the Plan to increase the maximum number of shares that may be issued under the Plan from 2,700,000 to 3,487,500. On May 22, 2009, the stockholders approved a second amendment to the Plan that increased the maximum number of shares that may be issued under the Plan to 9,144,000. On May 25, 2012, the stockholders approved a third amendment to the Plan that increased the maximum number of shares that may be issued under the Plan to 15,644,000. The following table summarizes the number of shares of common stock authorized for use under the Plan, the number of stock-based awards granted (net of expired or cancelled awards) under the Plan and the number of shares of common stock available for the grant of stock-based awards under the Plan:

Common stock authorized	15,644,000
Stock-based awards, including restricted stock and stock options granted, net of expired or cancelled	(11,089,000	)
Common stock available for grant of stock-based awards as of September 30, 2012	4,555,000

11

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note P – Stock-Based Compensation (continued)

Total equity-based compensation for the three and nine months ended September 30 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Restricted stock	$	3,319	$	1,093	$	8,177	$	4,050
Stock options	1,392		1,679		4,483		4,287
Total	$	4,711	$	2,772	$	12,660	$	8,337

Equity-based compensation is included in operating expenses on the Company’s Condensed Consolidated Statements of Income.

Stock Options

Cash proceeds and intrinsic values related to total stock options exercised during the three- and nine-month periods ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Proceeds from stock options exercised	$	2,040	$	520	$	6,991	$	4,005
Intrinsic value of stock options exercised	$	4,213	$	1,062	$	12,445	$	8,861

During the three and nine months ended September 30, 2012, options to purchase approximately 65,000 shares of common stock with a weighted average exercise price of $28.82 and options to purchase approximately 745,000 shares of common stock with a weighted average exercise price of $18.53 vested, respectively. During the three and nine months ended September 30, 2011, options to purchase approximately 86,000 shares of common stock with a weighted average exercise price of $24.61 and options to purchase approximately 697,000 shares of common stock with a weighted average exercise price of $15.23 vested, respectively. As of September 30, 2012, there were unvested options relating to 1,269,000 shares of common stock with a total of $7,845of unrecognized compensation cost and an average vesting period of 2.1 years.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted, which requires several assumptions. The expected term of the options represents the estimated period of time until exercise and is based on the historical experience of similar awards. Expected volatility is based on the historical volatility of the Company’s common stock. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. With the exception of special dividends paid in November of 2005 and 2006, the Company historically has not paid regular cash dividends and thus the expected dividend rate is assumed to be zero. The following weighted average assumptions were used for stock options granted:

	2012	2011
Volatility	41.1% to 47.4%	47.3% to 48.7%
Risk free interest rate	0.47% to 0.87%	0.61% to 1.78%
Expected life in years	3.1 to 4.6	2.8 to 4.4
Dividend yield	0.00%	0.00%
Weighted average fair value	$14.05	$10.91

12

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note P – Stock-Based Compensation (continued)

Activity relating to stock options granted under the Company’s plans and outside the plans during the nine months ended September 30, 2012 is as follows: 

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2012	2,703,000		$	17.79
Granted	213,000		40.30
Exercised	(423,000	)	16.51
Cancelled/Forfeited	(39,000	)	17.67
Outstanding at September 30, 2012	2,454,000		$	19.96	4.2 years	$	58,312
Exercisable at September 30, 2012	1,185,000		$	16.94	3.8 years	$	31,732

Restricted Stock

The following table summarizes restricted stock activity during the nine months ended September 30, 2012 and 2011:

	2012				2011
	Number of Shares		Weighted Average Fair Value at Grant Date		Number of Shares		Weighted Average Fair Value at Grant Date
Non-vested at January 1	671,000		$	25.44	563,000		$	17.20
Granted	2,409,000		36.22		334,000		31.34
Vested	(172,000	)	25.11		(179,000	)	14.93
Forfeited	(2,000	)	38.10		—		—
Non-vested at September 30	2,906,000		$	34.39	718,000		$	24.34

As of September 30, 2012, there was $92,431 of total unrecognized compensation cost related to restricted stock awards granted under the Plan. This cost is expected to be recognized over a weighted average of 10.1 years. The Company determines the fair value of its restricted stock awards based on the market price of its common stock on the date of grant.

On January 3, 2012, the Company and its Creative and Design Chief, Steven Madden, entered into an amendment of Mr. Madden’s existing employment agreement, pursuant to which, on February 8, 2012, Mr. Madden was granted 975,371 restricted shares of the Company’s common stock at the then market price of $41.01, which will vest in equal annual installments over a seven-year period commencing on December 31, 2017 and, thereafter, on each December 31 through December 31, 2023, subject to Mr. Madden’s continued employment on each such vesting date. Pursuant to the contract, on June 30, 2012, Mr. Madden exercised his right to receive an additional restricted stock award, and on July 3, 2012 he was granted 1,262,228 restricted shares of the Company's common stock at the then market price of $31.69, which will vest in the same manner as the prior grant.

13

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note Q – Acquisitions

Steve Madden Canada

On February 21, 2012, the Company purchased all of the assets of Steve Madden Canada Inc., Steve Madden Retail Canada Inc., Pasa Agency Inc. and Gelati Imports Inc. (collectively, “SM Canada”), the Company’s sole distributor in Canada since 1994, comprising SM Canada’s footwear, handbags and accessories wholesale and retail businesses. The transaction was completed for consideration of approximately $29,367 plus potential earn-out payments of up to a maximum of $38,000 (Canadian dollars, which converts to approximately the same in U.S. dollars), in the aggregate, based on achievement of certain earnings targets for each of the twelve-month periods ending on March 31, 2013 through 2017, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of SM Canada during the earn-out period. As of September 30, 2012, the Company estimates the fair value of the contingent consideration to be $19,975.

The transaction was accounted for using the acquisition method required by GAAP. Accordingly, the assets and liabilities of SM Canada were adjusted to their fair values, and the excess of the purchase price over the fair value of the assets acquired, including identified intangible assets, was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, which are subject to change. The purchase price has been preliminarily allocated as follows: 

Accounts receivable	$	2,496
Inventory	2,220
Prepaid expenses and other assets	147
Fixed assets	1,005
Re-acquired right	35,200
Customer relationships	4,400
Non-compete agreement	455
Accounts payable	(2,645		)
Accrued expenses	(802		)
Total fair value excluding goodwill	42,476
Goodwill	4,185
Net assets acquired	$	46,661

Prior to the acquisition, the Company and SM Canada had a preexisting relationship under which SM Canada had the right to use the Steve Madden brand throughout Canada in connection with the sale and distribution of merchandise. The settlement of the preexisting relationship is considered a re-acquired right and was valued based on the present value of estimated future cash flows.

The purchase price and related allocation are preliminary and may be revised as a result of adjustments made to the purchase price as may be required as additional information regarding assets and liabilities is revealed. Contingent consideration classified as a liability will be remeasured at fair value at each reporting date, until the contingency is resolved, with changes recognized in earnings. The goodwill related to this transaction is expected to be deductible for tax purposes over 15 years.

The Company incurred approximately $951 in acquisition related costs applicable to the SM Canada transaction, $800 of which were incurred in 2012. These expenses are included in operating expenses in the Company’s Condensed Consolidated Statements of Income.

In connection with the acquisition, the Company provided an interest free loan to the seller of SM Canada in the principal amount of $3,107 (Canadian dollars, $3,085 in US dollars). The note will be paid in five annual installments which are due on the dates the five annual earn-out payments are paid. The note was recorded net of the imputed interest, which will be amortized to income over the term of the note.

14

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note Q – Acquisitions (continued)

Cejon

On May 25, 2011, the Company acquired all of the outstanding shares of capital stock of closely held Cejon, Inc. and Cejon Accessories, Inc. from the sole stockholder of these companies, as well as all of the outstanding membership interests in New East Designs, LLC (together with Cejon Inc. and Cejon Accessories, “Cejon”) from its members (together with the sole stockholder of Cejon, the “Cejon Sellers”). Founded in 1991, Cejon designs, markets and sells cold weather accessories, fashion scarves, wraps and other trend accessories primarily under the Cejon brand name, private labels and under the Steve Madden brand name. Cejon had been a licensee of the Company for cold weather and selected other fashion accessories since September 2006. Management expects the Cejon acquisition will further strengthen and expand the Company’s accessories platform. The acquisition was completed for consideration of approximately $29,502 cash plus potential contingent payments pursuant to an earn-out agreement with the Cejon Sellers. The earn-out agreement specifies two tiers of potential payments to the Cejon Sellers based on the financial performance of Cejon for each of the twelve-month periods ending on June 30, 2012 through 2016, inclusive. The tier one earn-out is based on a graduated percentage of EBITDA up to a maximum EBITDA of $11,000 in each of the earn-out periods, provided that the total aggregate payments under this tier do not exceed $25,000. The tier two earn-out is based on a multiple of the amount that EBITDA exceeds certain levels in each of the earn-out periods, provided that the total aggregate payments under this tier do not exceed $33,000. The earn-out payment for the period ended June 30, 2012 was paid in the third quarter of this year.

The transaction was accounted for using the acquisition method required by GAAP. Accordingly, the assets and liabilities of Cejon were adjusted to their fair values, and the excess of the purchase price over the fair value of the assets acquired, including identified intangible assets, was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The purchase price has been allocated as follows:

Accounts receivable	$	3,631
Inventory	3,998
Prepaid expenses and other current assets	196
Fixed assets	190
Trade name	27,065
Customer relationships	3,225
Non-compete agreement	305
Other assets	24
Accounts payable	(1,318		)
Accrued expenses	(2,242		)
Total fair value excluding goodwill	35,074
Goodwill	17,759
Net assets acquired	$	52,833

Contingent consideration classified as a liability will be remeasured at fair value at each reporting date, until the contingency is resolved, with changes recognized in earnings. The goodwill related to this transaction is expected to be deductible for tax purposes over 15 years.

The Company incurred approximately $531 in acquisition related costs applicable to the Cejon transaction during the year ended December 31, 2011. These expenses were included in operating expenses in the Company’s Consolidated Statements of Income for the year ended December 31, 2011.

15

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note Q – Acquisitions (continued)

Topline

On May 20, 2011, the Company acquired all of the outstanding shares of capital stock of the closely held company, Topline from its sole stockholder (the “Topline Seller”). Founded in 1980, Topline and its subsidiaries design, manufacture, market and sell private label and branded women’s footwear primarily to department stores, specialty retailers and mass merchants. Topline has sourcing capabilities, sample making facilities and product development capabilities in China, including personnel and facilities engaged in direct sourcing. Management believes that Topline is an excellent strategic fit for the Company. The acquisition was completed for consideration of approximately $56,128 cash, plus potential contingent payments pursuant to an earn-out agreement with the Topline Seller. The earn-out agreement provides for potential payments to the Topline Seller based on the financial performance of Topline for the twelve-month period ended on June 30, 2012. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Topline during the earn-out period (see Note H).

The transaction was accounted for using the acquisition method required by GAAP. Accordingly, the assets and liabilities of Topline were adjusted to their fair values, and the excess of the purchase price over the fair value of the assets acquired, including identified intangible assets, was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The purchase price, net of an estimated working capital adjustment due to the Company, has been allocated as follows:

Accounts receivable	$	55,950
Inventory	8,460
Prepaid expenses and other current assets	990
Fixed assets	3,895
Trade name	16,600
Customer relationships	7,900
Non-compete agreement	300
Other assets	108
Accounts payable	(40,475		)
Accrued expenses	(7,784		)
Income tax payable	(3,082		)
Deferred tax liability	(8,491		)
Total fair value excluding goodwill	34,371
Goodwill	31,003
Net assets acquired	$	65,374

Contingent consideration classified as a liability will be remeasured at fair value at each reporting date, until the contingency is resolved, with changes recognized in earnings. The trade name, customer relationships, non-compete agreement and goodwill related to this transaction are not deductible for tax purposes. 

The Company incurred approximately $529 in acquisition related costs applicable to the Topline transaction during the year ended December 31, 2011. These expenses were included in operating expenses in the Company’s Condensed Consolidated Statements of Income.

The results of operations of SM Canada, Cejon and Topline have been included in the Company’s Condensed Consolidated Statements of Income from the date of the acquisition. Unaudited pro forma information related to these acquisitions is not included, as the impact of these transactions is not material to the Company’s consolidated results.

16

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note R – Goodwill and Intangible Assets

The following is a summary of the carrying amount of goodwill by segment as of September 30, 2012:

	Wholesale					Net Carrying
	Footwear		Accessories		Retail	Amount
Balance at January 1, 2012	$	20,939	$	49,155	5,501	$	75,595
Purchase accounting adjustment	11,610		169		—	11,779
Acquisition of SM Canada	2,971		—		1,214	4,185
Balance at September 30, 2012	$	35,520	$	49,324	6,715	$	91,559

Pursuant to the final reconciliation of assets and liabilities acquired in the Topline and Cejon acquisitions, adjustments to goodwill were recorded in the amount of $11,610 and $169, respectively.

The following table details identifiable intangible assets as of September 30, 2012:

	Estimated Lives	Cost Basis		Accumulated Amortization		Net Carrying Amount
Trade names	6–10 years	$	4,590	$	1,509	$	3,081
Customer relationships	10 years	27,234		6,897		20,337
License agreements	3–6 years	5,600		5,600		—
Non-compete agreement	5 years	2,440		1,446		994
Other	3 years	14		14		—
		39,878		15,466		24,412
Re-acquired right	indefinite	35,200		—		35,200
Tradenames	indefinite	76,888		—		76,888
		$	151,966	$	15,466	$	136,500

The estimated future amortization expense of purchased intangibles as of September 30, 2012 is as follows:

2012 (remaining three months)	$	838
2013	3,351
2014	3,286
2015	3,101
2016	2,795
Thereafter	11,041
	$	24,412

17

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note S – Commitments, Contingencies and Other

Legal proceedings:

(a) On July 19, 2011, an individual purporting to act on behalf of a class of similarly situated individuals commenced a civil action in the United States District Court for the Central District of California, Samantha Ellison, individually and on behalf of a class of similarly situated individuals v. Steven Madden, Ltd., No. CV11-05935 (the “Ellison Action”). The Ellison Action asserts that the Company made unsolicited commercial text calls to wireless telephone numbers of the class members in violation of the Telecommunications Privacy Act and seeks, on behalf of the class, an injunction requiring the Company to cease all wireless spam activities and an award of statutory damages to the class members together with costs and reasonable attorneys' fees. The Company responded by challenging the suit on several grounds. Settlement discussions have resulted in a settlement being reached on July 30, 2012 for an aggregate gross fund amount of $10,000, including all settlement costs and administration fees, as well as the fees recoverable by class counsel. As the settlement calls for the reversion of all monies not paid to class claimants, it is possible that the actual settlement amount paid will be substantially less than $10,000. In addition, the Company's insurance coverage will cover a portion of the settlement at the rate of 45% of the initial settlement payment of $5,000 and 30% of amounts over and above the initial settlement payment. On September 25, 2012 the court certified the class for settlement purposes only and approved the settlement on a preliminary basis. The court further ordered all litigants to make further submissions to the court concerning, among other things, the merits and value of the case and to deliver notice of the proposed settlement to all class members prior to a fairness hearing and final approval of the settlement. Based on the settlement as contemplated and applying the insurance coverage as applicable, the maximum exposure to the Company is approximately $6,250; however, in light of historical "take rates" in cases of this type, the Company's counsel estimates that the actual liability to the Company will be between approximately $2,000 and $2,500. Accordingly, the Company recorded a liability in the amount of $2,500 in the second quarter of 2012. This liability is subject to change to reflect any change in the status of this matter.

(b) On February 2, 2012, two individuals purporting to be stockholders of the Company commenced separate civil actions in the Supreme Court of New York, Queens County, Mark Ioffe, Derivatively on Behalf of Nominal Defendant Steven Madden, Ltd. v. Steven Madden, et. al, No. 700188-2012 (the “Ioffe Action”) and Catherine L. Phillips, Derivatively on Behalf of Nominal Defendant Steven Madden, Ltd. v. Steven Madden, et. al, No. 700189-2012 (together with the Ioffe Action, the “Actions”). The Actions assert derivative claims challenging the decision of the Company’s Board of Directors in January 2012 to amend Steven Madden’s employment agreement dated July 15, 2005, and amended as of December 14, 2009 (the “Madden Employment Agreement”) and to amend the promissory note (the “Promissory Note”) setting forth Mr. Madden’s obligations in respect of a loan made by the Company to Mr. Madden in 2007 and amended in 2009. The Actions assert that the Board violated its duties of loyalty and good faith by approving the amendments to the Madden Employment Agreement and the Promissory Note and that the changes set forth in the amendments constitute a waste of corporate assets. The Actions also assert claims of unjust enrichment against Mr. Madden. The Actions seek, on behalf of the Company, disgorgement of any compensation that Mr. Madden has received as a result of the amended Madden Employment Agreement, an award of damages to the Company, and a declaration that the amendments of the Madden Employment Agreement and the Promissory Note are void. The Company and the other defendants filed a motion for dismissal of the Actions based on, among other things, the plaintiffs’ failure to make a demand that the Company’s Board of Directors investigate their claims. On September 13, 2012 the court granted the defendants' motion to dismiss the Actions. As of the date hereof, the plaintiffs have not filed a notice of appeal with respect to the dismissal of the actions.

(c) On August 10, 2005, following the conclusion of an audit of the Company conducted by auditors for U.S. Customs and Border Protection (“U.S. Customs”) during 2004 and 2005, U.S. Customs issued a report that asserts that certain commissions that the Company treated as “buying agents’ commissions” (which are non-dutiable) should be treated as “selling agents’ commissions” and hence are dutiable. Subsequently, U.S. Immigration and Customs Enforcement notified the Company’s legal counsel that a formal investigation of the Company’s importing practices had been commenced as a result of the audit. In September of 2007, U.S. Customs notified the Company that it had finalized its assessment of the underpaid duties at $1,400. The Company, with the advice of legal counsel, evaluated the liability in the case, including additional duties, interest and penalties, and believed that it was not likely to exceed $3,045, and accordingly, a liability for this amount was recorded as of December 31, 2009. The Company contested the conclusions of the U.S. Customs audit and filed a request for review and issuance of rulings thereon by U.S. Customs

18

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note S – Commitments, Contingencies and Other (continued)

Headquarters, of Regulations and Rulings, under internal advice procedures. On September 20, 2010, the Company was advised by legal counsel that U.S. Customs had issued a ruling in the matter, concluding that the commissions paid by the Company pursuant to buying agreements entered into by the Company and one of its two buying agents under review were bona fide buying-agent commissions and, therefore, were non-dutiable. With respect to the second

buying agent, U.S. Customs also ruled that beginning in February of 2002, commissions paid by the Company were bona fide buying agent commissions and, therefore, were non-dutiable. However, U.S. Customs found that the Company’s pre-2002 buying agreements with the second agent were legally insufficient to substantiate a buyer-buyer’s agent relationship between the Company and the agent and that commissions paid to the second agent under such buying agreements, in fact, were dutiable. On the basis of the U.S. Customs ruling, the Company reevaluated the liability in the case and believes that it is not likely to exceed $1,248 and the liability was reduced from $3,045 to such amount as of September 30, 2010.

On November 21, 2011, U.S. Customs issued a pre-penalty notice to the Company in which it alleges that gross negligence by the Company resulted in an underpayment of duties with respect to certain pre-2002 buying agreements and claims that the Company owes $342 as an additional duty and $1,367 in monetary penalties. In its February 16, 2012 response to the pre-penalty notice, the Company submitted that it owes no additional duty and, further, did not through negligence or gross negligence fail to pay any duty or engage in conduct amounting to either gross negligence or negligence. The Company requested that U.S. Customs withdraw its proposal to issue a notice of penalty and take no further adverse action against the Company. In the event that U.S. Customs is not inclined to withdraw the pre-penalty notice after review of the Company’s response, the Company has requested the opportunity to make an oral presentation to U.S. Customs prior to the issuance of a notice of penalty. In the event that U.S. Customs decides to issue a notice of penalty, the Company intends to file a petition for relief requesting a reduction of the level of culpability and mitigation of the penalty amount assessed. The maximum total amount of damages related to this matter is approximately $1,700 for which the Company has accrued $1,248.

(d) The Company has been named as a defendant in certain other lawsuits in the normal course of business. In the opinion of management, after consulting with legal counsel, the liabilities, if any, resulting from these matters should not have a material effect on the Company’s financial position or results of operations. It is the policy of management to disclose the amount or range of reasonably possible losses in excess of recorded amounts in its annual report.

Note T – Operating Segment Information

The Company operates the following business segments: Wholesale Footwear, Wholesale Accessories, Retail, First Cost and Licensing. The Wholesale Footwear segment, through sales to department stores, mid-tier retailers, mass merchants and specialty stores, derives revenue, both domestically and worldwide through our international business, from sales of branded and private label women’s, men’s, girls’ and children’s footwear. The Wholesale Accessories segment, which includes branded and private label handbags, belts and small leather goods as well as cold weather and selected other fashion accessories, derives revenue from sales to department stores, mid-tier retailers, mass merchants and specialty stores, domestically and worldwide through our international business. Our Wholesale Footwear and Wholesale Accessories segments international business derive revenue from Canada and, under special distribution arrangements, from Asia, Europe, the Middle East, Mexico, Australia, India and Central and South America. The Retail segment, through the operation of Company-owned retail stores in the United States and Canada and the Company’s websites, derives revenue from sales of branded women’s, men’s and children’s footwear, accessories and licensed products to consumers. The First Cost segment represents activities of a subsidiary which earns commissions for serving as a buying agent of footwear products to mass-market merchandisers, mid-tier department stores and other retailers with respect to their purchase of footwear. In the Licensing segment, the Company licenses its Steve Madden® and Steven by Steve Madden® trademarks and other trademark rights for use in connection with the manufacture, marketing and sale of sunglasses, eyewear, outerwear, bedding, hosiery and sleepwear. In addition, this segment licenses the Betsey Johnson® trademarks for use in connection with the manufacture, marketing and sale of sleepwear, jewelry, swimwear, eyewear, watches, fragrances, outerwear and luggage.

19

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note T – Operating Segment Information (continued)

As of and three months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail		First Cost		Licensing		Corporate		Consolidated
September 30, 2012:
Net sales to external customers	$	228,720	$	82,818	$	311,538	$	45,345							$	356,883
Gross profit	75,785		27,918		103,703		27,512								131,215
Commissions and licensing fees – net	—		—		—		—		$	2,157	$	1,718			3,875
Income from operations	38,357		15,089		53,446		4,196		2,157		1,718		(5,144	)	56,373
Segment assets	$	488,937	$	167,127	656,064		86,085		53,159		—				795,308
Capital expenditures					$	3,441	$	4,146	$	—	$	—			$	7,587
September 30, 2011:
Net sales to external customers	$	211,223	$	67,030	$	278,253	$	35,634							$	313,887
Gross profit	66,652		21,973		88,625		20,828								109,453
Commissions and licensing fees – net	—		—		—		—		$	3,318	$	2,331			5,649
Income from operations	31,616		10,974		42,590		2,269		3,318		2,331		—		50,508
Segment assets	$	374,329	$	157,369	531,698		69,242		50,074		—				651,014
Capital expenditures					$	4,558	$	1,715	$	—	$	—			$	6,273

As of and nine months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail		First Cost		Licensing		Corporate		Consolidated
September 30, 2012:
Net sales to external customers	$	618,914	$	169,700	$	788,614	$	122,931							$	911,545
Gross profit	193,964		62,000		255,964		75,598								331,562
Commissions and licensing fees – net	—		—		—		—		$	6,897	$	5,703			12,600
Income from operations	86,537		28,914		115,451		10,629		6,897		5,703		(9,454	)	129,226
Segment assets	$	488,937	$	167,127	656,064		86,085		53,159		—				795,308
Capital expenditures					$	5,574	$	10,043	$	—	$	—			$	15,617
September 30, 2011:
Net sales to external customers	$	468,204	$	119,480	$	587,684	$	101,110							$	688,794
Gross profit	159,315		42,213		201,528		61,152								262,680
Commissions and licensing fees – net	—		—		—		—		$	8,605	$	6,043			14,648
Income from operations	73,713		18,620		92,333		8,170		8,605		6,043		—		115,151
Segment assets	$	374,329	$	157,369	531,698		69,242		50,074		—				651,014
Capital expenditures					$	8,195	$	4,051	$	—	$	—			$	12,246

20

STEVEN MADDEN, LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements – Unaudited

September 30, 2012

($ in thousands except share and per share data)

Note T – Operating Segment Information (continued)

Revenues by geographic area for the three- and nine-month periods ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Domestic	$	327,965	$	297,873	$	847,020	$	650,408
International	28,918		16,014		64,525		38,386
Total	$	356,883	$	313,887	$	911,545	$	688,794

21

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto appearing elsewhere in this document.

This Quarterly Report contains certain “forward-looking statements” as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, forward-looking statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may”, “will”, “expect”, “believe”, “anticipate”, “project”, “plan”, “intend”, “estimate”, and “continue”, and their opposites and similar expressions are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties discussed in our Annual Report on Form 10-K for the year ended December 31, 2011. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Overview: 

($ in thousands, except retail sales data per square foot, earnings per share and per share data)

Steven Madden, Ltd. and its subsidiaries (collectively the “Company”) design, source, market and sell fashion-forward branded and private label footwear for women, men and children. In addition, we design, source, market and sell name brand and private label fashion handbags and accessories, through our Accessories Division. We distribute our products through department stores, specialty stores, luxury retailers, national chains, mass merchants and in our retail stores and our e-commerce websites throughout the United States, Canada and under special distribution arrangements in Asia, Europe, the Middle East, Mexico, Australia, India and Central and South America. Our product line includes a broad range of contemporary styles designed to establish or capitalize on market trends, complemented by core product offerings. We have established a reputation for design creativity and our ability to offer quality products in popular styles at accessible price points.

We achieved record sales and earnings results in the third quarter of 2012. Net sales for the three months ended September 30, 2012 increased 14% to $356,883 from $313,887 in the same period of last year. Net income increased 18% to $37,896 in the third quarter of 2012 compared to $31,911 in the same period of last year. Net income included $5,144 in impairment charges and $852 in bad debt expense related to the recently filed bankruptcy of Bakers LLC,. The effective tax rate for the third quarter of 2012 decreased to 35.4% compared to 39.0% in the third quarter of last year due primarily to a tax benefit of $2,109 related to the third quarter impact of a portion of earnings from the Company's foreign operations that have been invested indefinitely in the acquisition and expansion of SM Canada. Inclusive of the charges related to the Bakers bankruptcy, which negatively impacted earnings per share by $0.08, diluted earnings per share increased to $0.86 per share on 44,237,000 diluted weighted average shares outstanding compared to $0.74 per share on 43,407,000 diluted weighted average shares outstanding in the third quarter of last year.

In our Retail segment, same store sales (sales of those stores, including the e-commerce website, that were in operation throughout the third quarters of 2012 and 2011) increased 8.6%, and sales per square foot increased to $904 in 2012 compared to sales per square foot of $840 (recomputed using the current year's methodology) in 2011. As of September 30, 2012, we had 99 stores in operation, compared to 82 stores as of September 30, 2011.

Our inventory turnover (calculated on a trailing twelve month average) increased to 10.6 times compared to 9.5 times in the comparable period of last year. Our accounts receivable average collection days were 66 days in the third quarter of 2012 compared to 62 days in the same period of 2011, primarily due to the significant growth in our private label business and our international business, both of which have customers with extended payment terms. As of September 30, 2012, we had $154,355 in cash, cash equivalents and marketable securities, no short or long-term debt and total stockholders’ equity of $586,354. Working capital increased to $274,197 as of September 30, 2012, compared to $197,553 on September 30, 2011.

The following tables set forth information on operations for the periods indicated:

22

Selected Financial Information

Three Months Ended
September 30,

($ in thousands)

	2012				2011
CONSOLIDATED:
Net sales	$	356,883	100.0	%	$	313,887	100.0	%
Cost of sales	225,668		63.2	%	204,434		65.1	%
Gross profit	131,215		36.8	%	109,453		34.9	%
Other operating income – net of expenses	3,875		1.1	%	5,649		1.8	%
Operating expenses	73,573		20.6	%	64,594		20.6	%
Impairment charges and provision for litigation	5,144		1.4	%	—		—	%
Income from operations	56,373		15.8	%	50,508		16.1	%
Interest and other income – net	2,138		0.6	%	1,732		0.6	%
Income before income taxes	58,511		16.4	%	52,240		16.6	%
Net income	37,896		10.6	%	31,911		10.2	%
By Segment:
WHOLESALE FOOTWEAR SEGMENT:
Net sales	$	228,720	100.0	%	$	211,223	100.0	%
Cost of sales	152,935		66.9	%	144,571		68.4	%
Gross profit	75,785		33.1	%	66,652		31.6	%
Operating expenses	37,428		16.4	%	35,036		16.6	%
Income from operations - before impairment charges and provision for litigation	38,357		16.8	%	31,616		15.0	%
WHOLESALE ACCESSORIES SEGMENT:
Net sales	$	82,818	100.0	%	$	67,030	100.0	%
Cost of sales	54,900		66.3	%	45,057		67.2	%
Gross profit	27,918		33.7	%	21,973		32.8	%
Operating expenses	12,829		15.5	%	10,999		16.4	%
Income from operations - before impairment charges and provision for litigation	15,089		18.2	%	10,974		16.4	%
RETAIL SEGMENT:
Net sales	$	45,345	100.0	%	$	35,634	100.0	%
Cost of sales	17,833		39.3	%	14,806		41.6	%
Gross profit	27,512		60.7	%	20,828		58.4	%
Operating expenses	23,316		51.4	%	18,559		52.1	%
Income from operations - before impairment charges and provision for litigation	4,196		9.3	%	2,269		6.4	%
Number of stores	99				82
FIRST COST SEGMENT:
Other commission income – net of expenses	$	2,157	100.0	%	$	3,318	100.0	%
LICENSING SEGMENT:
Licensing income – net of expenses	$	1,718	100.0	%	$	2,331	100.0	%

23

Selected Financial Information

Nine Months Ended September 30,

($ in thousands)

	2012				2011
CONSOLIDATED:
Net sales	$	911,545	100.0	%	$	688,794	100.0	%
Cost of sales	579,983		63.6	%	426,114		61.9	%
Gross profit	331,562		36.4	%	262,680		38.1	%
Other operating income – net of expenses	12,600		1.4	%	14,648		2.1	%
Operating expenses	205,482		22.5	%	162,177		23.5	%
Impairment charges and provision for litigation	9,454		1.0	%	—		—	%
Income from operations	129,226		14.2	%	115,151		16.7	%
Interest and other income – net	4,271		0.5	%	4,905		0.7	%
Income before income taxes	133,497		14.6	%	120,056		17.4	%
Net income	86,663		9.5	%	73,547		10.7	%
By Segment:
WHOLESALE FOOTWEAR SEGMENT:
Net sales	$	618,914	100.0	%	$	468,204	100.0	%
Cost of sales	424,950		68.7	%	308,889		66.0	%
Gross profit	193,964		31.3	%	159,315		34.0	%
Operating expenses	107,427		17.4	%	85,602		18.3	%
Income from operations - before impairment charges and provision for litigation	86,537		14.0	%	73,713		15.7	%
WHOLESALE ACCESSORIES SEGMENT:
Net sales	$	169,700	100.0	%	$	119,480	100.0	%
Cost of sales	107,700		63.5	%	77,267		64.7	%
Gross profit	62,000		36.5	%	42,213		35.3	%
Operating expenses	33,086		19.5	%	23,593		19.7	%
Income from operations - before impairment charges and provision for litigation	28,914		17.0	%	18,620		15.6	%
RETAIL SEGMENT:
Net sales	$	122,931	100.0	%	$	101,110	100.0	%
Cost of sales	47,333		38.5	%	39,958		39.5	%
Gross profit	75,598		61.5	%	61,152		60.5	%
Operating expenses	64,969		52.8	%	52,982		52.4	%
Income from operations - before impairment charges and provision for litigation	10,629		8.6	%	8,170		8.1	%
Number of stores	99				82
FIRST COST SEGMENT:
Other commission income – net of expenses	$	6,897	100.0	%	$	8,605	100.0	%
LICENSING SEGMENT:
Licensing income – net of expenses	$	5,703	100.0	%	$	6,043	100.0	%

24

RESULTS OF OPERATIONS

($ in thousands)

Three Months Ended September 30,2012 Compared to Three Months Ended September 30,2011

Consolidated:

Net sales for the three months ended September 30, 2012 increased 14% to $356,883 compared to $313,887 in the same period of last year. Gross margin improvements across all of our operating segments propelled an increase in overall gross margin to 36.8% for the third quarter of 2012 compared to 34.9% in the third quarter of 2011. Operating expenses increased in the third quarter of this year to $73,573 from $64,594 in the third quarter of last year, partially due to incremental expenses related to the recently acquired SM Canada. In the third quarter of 2012, we recorded $5,144 in impairment charges resulting from the Bakers bankruptcy. Our commission and licensing fee income decreased to $3,875 in the third quarter of 2012 compared to $5,649 in the third quarter of 2011, partially due to a $852 bad debt expense pursuant to the Bakers bankruptcy. The effective tax rate for the third quarter of 2012 decreased to 35.4% compared to 39.0% in the third quarter of last year due primarily to a tax benefit of $2,109 related to the third quarter impact of a portion of earnings from the Company's foreign operations that have been invested indefinitely in the acquisition and expansion of SM Canada. Net income for the third quarter of 2012 increased 18% to $37,896 compared to net income for the quarter ended September 30, 2011 of $31,911.

Wholesale Footwear Segment:

Net sales from the Wholesale Footwear segment accounted for $228,720 or 64%, and $211,223 or 67% of our total net sales for the third quarter of 2012 and 2011, respectively. The increase in net sales in the quarter is primarily due to double digit sales increases in our signature Steve Madden® Women's brand, Betsey Johnson® shoes and our private label shoe business. In addition, our new Superga brand, which began shipping in the first quarter of this year and our new Betseyville® shoe brand, which began shipping in the current quarter, contributed to the increase of net sales in the third quarter of 2012. Finally, the increase in net sales is partially due to incremental sales from our new SM Canada business, which we acquired in February of this year.

Gross profit margin in the Wholesale Footwear segment increased to 33.1% in the third quarter of 2012 from 31.6% in the same period last year, primarily due to a decrease in markdowns and allowances primarily in Steve Madden Women's and in several of our other brands. In addition, the gross profit margin in our private label business increased 480 basis points in the third quarter of 2012 when compared to the same period of last year, primarily due to an improved sourcing model. Operating expenses increased to $37,428 in the third quarter of 2012 from $35,036 in the same period of last year. As a percentage of sales, operating expenses improved to 16.4% in the third quarter of 2012 from 16.6% in the same period of 2011, reflecting leverage from increased sales. Income from operations for the Wholesale Footwear segment increased to $38,357 for the quarter ended September 30, 2012 compared to $31,616 for the same period of last year.

Wholesale Accessories Segment:

Net sales generated by the Wholesale Accessories segment accounted for $82,818 or 23%, and 67,030 or 21% of total Company net sales for the third quarters of 2012 and 2011, respectively. This 24% increase in net sales in the third quarter of 2012 was propelled by a more than 100% net sales increase in Steve Madden® handbags and a 52% net sales increase in our private label business. We also realized double digit sales increases in our Big Buddha® brand and in our belt business, as well as single digit net sales increases in our Betsey Johnson® and Cejon® brands in the third quarter of 2012.

Gross profit margin in the Wholesale Accessories segment increased to 33.7% in the third quarter of this year from 32.8% in the same period last year, primarily due to the significant growth of our Steve Madden® and Big Buddha® handbag businesses, which typically achieve higher gross margins. In addition, the increase is the result of a gross profit margin increase in our private label business of 910 basis points, due to an increase in initial margins. In the third quarter of 2012, operating expenses increased to $12,829 compared to $10,999 in the prior year. As a percentage of sales, operating expenses improved to 15.5% in the third quarter of 2012 from 16.4% in the same period of 2011, reflecting leverage from increased sales. Income from operations for the Wholesale Accessories segment increased 37% to $15,089 for the three-month period ended September 30, 2012 compared to $10,974 for the same period of last year.

Retail Segment:

In the third quarter of 2012, net sales from the Retail segment accounted for $45,345 or 13% of our total net sales compared to $35,634 or 11% of our total net sales in the same period last year. We opened fourteen new stores, acquired seven stores as part

25

of the acquisition of SM Canada, established a Superga online store and closed five under-performing stores during the twelve months ended September 30, 2012. As a result, we had 99 retail stores as of September 30, 2012 compared to 82 stores as of September 30, 2011. The 99 stores currently in operation include 84 Steve Madden® stores, eight Steve Madden® outlet stores, three Steven® stores, one Report® store, one Superga store and two e-commerce websites.Comparable store sales (sales of those stores, including the e-commerce websites, that were open throughout the third quarters of 2012 and 2011) increased 8.6% in the third quarter of this year. In the quarter ended September 30, 2012, gross margin increased to 60.7% from 58.4% in the same period of 2011,primarily due to the impact of the ten new stores currently open in Canada which achieve significantly higher gross profit margins than stores located in the U.S. In the third quarter of 2012, operating expenses increased to $23,316 compared to $18,599 in the third quarter of last year, primarily due to the incremental cost associated with the net year-over-year increase of seventeen stores. As a percentage of sales, operating expenses improved to 51.4% in the third quarter of 2012 from 52.1% in the same period of last year, reflecting leverage from increased sales. Income from operations for the Retail segment increased to $4,196 in the second quarter of this year from $2,269 in the same period of last year.

First Cost Segment:

The First Cost segment generated net commission income and design fees of $2,157 for the three-month period ended September 30, 2012, compared to $3,318 for the comparable period of 2011. This decrease is primarily due to a $852 bad debt expense pursuant to the Bakers bankruptcy as well as a decline in business with Bakers during the third quarter of 2012.

Licensing Segment:

Net licensing income was $1,718 and $2,331 for the three months ended September 30, 2012 and 2011, respectively. The decrease in net licensing revenue is partially due to an increase in marketing expenditures for the Betsey Johnson brand.

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Consolidated:

Net sales for the nine months ended September 30, 2012 increased 32% to $911,545 from $688,794 for the comparable period of 2011. During the nine months ended September 30, 2012, gross margin decreased to 36.4% compared to 38.1% in the same period of last year, primarily due to sales mix shifts in our Wholesale Footwear segment as a result of the addition of the Topline business, and significant sales increases in our Target private label business and our international business, which typically achieve lower gross margins. Operating expenses increased for the nine months ended September 30, 2012 to $205,482 from $162,177 in the same period of the prior year, primarily due to incremental costs associated with the aforementioned new divisions, SM Canada, Topline and Cejon. As a percentage of sales, operating expenses decreased in the first nine months of this year to 22.5% from 23.5% in the same period of last year. During the nine months ended September 30, 2012, we recorded impairment charges of $6,954 related to the bankruptcies of Betsey Johnson and Bakers, and recorded an expense of $2,500 for a class action lawsuit related to unauthorized text messaging. Commission and licensing fee income decreased to $12,600 in the first nine months of 2012 compared to $14,648 in the first nine months of 2011, partially due to a $852 bad debt expense pursuant to the Bakers bankruptcy. The effective tax rate for the nine months ended 2012 decreased to 35.1% compared to 38.8% in the same period of last year due primarily to a tax benefit of $4,983 related to the year-to-date impact of a portion of earnings from the Company's foreign operations that have been invested indefinitely in the acquisition and expansion of SM Canada. Net income increased 18% to $86,663 in the first nine months of this year compared to $73,547 in the same period last year.

Wholesale Footwear Segment:

Net sales from the Wholesale Footwear segment accounted for $618,914 or 68% and $468,204 or 68% of our total net sales for the first nine months of 2012 and 2011, respectively. The increase in net sales is partially due to incremental sales from our recently acquired SM Canada business and our Topline business acquired in May 2011. Organic net sales growth was driven by a 45% increase in net sales in our wholesale private label business. The increase in net sales is also due to double digit sales increases in our signature Steve Madden® Women's brand and the Betsey Johnson® shoe brand. In addition, our new Superga® brand, which began shipping in the first quarter of this year and our new Betseyville® shoe brand, which began shipping in the current quarter, contributed to the increase in net sales in the first nine months of 2012.

Gross profit margin decreased to 31.3% in the first nine months of this year from 34.0% in the same period last year, primarily due to sales mix shifts as a result of the addition of the Topline business, and significant sales increases in our Target private label business and our international business, which typically achieve lower gross margins. In the first nine months of 2012, operating

26

expenses increased to $107,427 from $85,602 in the same period of 2011. As a percentage of sales, operating expenses improved to 17.4% in the first nine months of 2012 from 18.3% in the same period of last year, reflecting leverage from increased sales. Income from operations for the Wholesale Footwear segment increased to $86,537 for the nine-month period ended September 30, 2012 compared to $73,713 for the same period of 2011.

Wholesale Accessories Segment:

Net sales generated by the Wholesale Accessories segment accounted for $169,700 or 19% and $119,480 or 17% of total Company net sales for the nine months ended September 30, 2012 and 2011, respectively. This increase in net sales is partially due to sales contributed by our new Cejon business, which we acquired in the second quarter of 2011. Exclusive of Cejon, organic growth in the Accessories segment was 41%. This increase in organic sales was driven by strong sales results across all the accessories product lines including a 117% net sales increase in Steve Madden® handbags followed by a 40% increase in Betsey Johnson® handbags, a 24% increase in our private label business and a 21% increase in Big Buddha® handbags.

Gross profit margin in the Wholesale Accessories segment increased to 36.5% in the first nine months of this year from 35.3% in the same period last year, primarily due to the significant growth of our Steve Madden® and Betsey Johnson® handbag businesses, which typically achieve higher gross margins. In the first nine months of 2012, operating expenses increased to $33,086 compared to $23,593 in the first nine months of 2011. As a percentage of sales, operating expenses improved to 19.5% in the first nine months of 2012 from 19.7% in the same period of 2011, reflecting leverage from increased sales. Income from operations for the Wholesale Accessories segment increased 55% to $28,914 for the nine months ended September 30, 2012 compared to $18,620 for the same period of 2011.

Retail Segment:

In the first nine months of 2012, net sales from the Retail segment accounted for $122,931 or 13% of our total net sales compared to $101,110 or 15% of total net sales in the same period last year. We opened fourteen new stores, acquired seven stores as part of the acquisition of SM Canada, established a Superga® online store and closed five under-performing stores during the twelve months ended September 30, 2012. As a result, we had 99 retail stores as of September 30, 2012 compared to 82 stores as of September 30, 2011. The 99 stores currently in operation include 84 Steve Madden® stores, eight Steve Madden® outlet stores, three Steven® stores, one Report® store, one Superga® store and two e-commerce websites. Comparable store sales (sales of those stores, including the e-commerce websites, that were open throughout the first nine months of 2012 and 2011) increased 9% in the first nine months of this year. The gross margin in the Retail segment increased to 61.5% in the nine months ended September 30, 2012 from 60.5% in the corresponding nine months of 2011, primarily due to the impact of the ten new stores currently open in Canada which achieve significantly higher gross profit margins than stores located in the U.S as well as improved operating efficiencies. During the first nine months of 2012, operating expenses were $64,969 compared to $52,982 in the same period of last year, primarily due to the incremental cost associated with the net year-over-year increase of seventeen stores. For the nine months ended September 30, 2012, income from operations for the Retail segment increased to $10,629 compared to $8,170 for the same period in 2011.

First Cost Segment:

The First Cost segment generated net commission income and design fees of $6,897 for the nine-month period ended September 30, 2012 compared to $8,605 for the comparable period of 2011. This decrease is primarily due to a $852 bad debt expense pursuant to the Bakers bankruptcy as well as a decline in business with Bakers during the first nine months of 2012.

Licensing Segment:

During the nine months ended September 30, 2012, net licensing income decreased to $5,703 from $6,043 in the same period of last year.

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LIQUIDITY AND CAPITAL RESOURCES

($ in thousands)

The Company has a collection agency agreement with Rosenthal & Rosenthal, Inc. (“Rosenthal”). The agreement provides us with a credit facility in the amount of $30,000, having a sub-limit of $15,000 on the aggregate face amount of letters of credit, at an interest rate based, at our election, upon either the prime rate or LIBOR. The agreement can be terminated by the Company or Rosenthal at any time with 60 days’ prior written notice.

As of September 30, 2012, we had working capital of $274,197. We had cash and cash equivalents of $64,927, investments in marketable securities of $89,428 and we did not have any long term debt.

We believe that based upon our current financial position and available cash, cash equivalents and marketable securities, we will meet all of our financial commitments and operating needs for at least the next twelve months.

OPERATING ACTIVITIES

($ in thousands)

Cash provided by operations was $14,758 in the first nine months of 2012 compared to cash provided by operations of $7,385 in the same period of last year. The primary sources of cash were net income of $86,628, an increase in accounts payable and other accrued expenses of $20,896 and a decrease of accounts receivable of $5,496. The primary uses of cash were increases of due from factor, inventories and prepaid expenses, deposits and other assets of $96,899, $22,180 and $5,792, respectively.

INVESTING ACTIVITIES

($ in thousands)

During the nine-month period ended September 30, 2012, we invested $48,955 in marketable securities and received $40,150 from the maturities and sales of securities. Also during the first nine months of 2012, we paid approximately $29,367 for the acquisition of SM Canada and, in connection with the acquisition, provided a loan in the amount of $3,085 to the seller of SM Canada. We also made capital expenditures of $15,617, principally for twelve new stores opened in the first nine months of 2012, improvements to existing stores, leasehold improvements to office space and systems enhancements.

FINANCING ACTIVITIES

($ in thousands)

During the nine-month period ended September 30, 2012, net cash provided by financing activities was $11,289, which consisted of proceeds from the exercise of stock options of $6,991 and the tax benefit from the exercise of options of $4,298.

CONTRACTUAL OBLIGATIONS

($ in thousands)

Our contractual obligations as of September 30, 2012 were as follows:

	Payment due by period
Contractual Obligations	Total		Remainder of 2012		2013-2014		2015-2016		2017 and after
Operating lease obligations	$	169,418	$	6,410	$	48,028	$	44,230	$	70,750
Purchase obligations	186,963		186,963		—		—		—
Contingent payment liability	57,751		17,791		18,785		17,121		4,054
Other long-term liabilities (future minimum royalty payments)	6,816		653		5,863		300		—
Total	$	420,948	$	211,817	$	72,676	$	61,651	$	74,804

At September 30, 2012, we had un-negotiated open letters of credit for the purchase of inventory of approximately $1,608.

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On January 3, 2012, the Company and its Creative and Design Chief, Steven Madden, entered into an amendment, dated as of December 31, 2011, to Mr. Madden’s existing employment agreement with the Company. The amended agreement, which extends the term of Mr. Madden's employment through December 31, 2023, provides for a base salary of approximately $5,416 in 2012, approximately $7,417 in 2013, approximately $9,667 in 2014, approximately $11,917 in 2015 and approximately $10,698 for the period between January 1, 2016 through the expiration of the term of employment. The employment agreement provides Mr. Madden with the right, exercisable on certain specified dates in fiscal year 2012 only, to elect to receive a grant of restricted stock for a number of shares of the Company’s common stock valued at $40,000 in consideration for a reduction in his annual base salary in years subsequent to 2012 as follows: $4,000 in 2013, approximately $6,125 in 2014, approximately $8,250 in 2015 and approximately $7,026 for the period between January 1, 2016 through the expiration of the employment agreement on December 31, 2023. On June 30, 2012, Mr. Madden exercised this right and on July 3, 2012 he was granted 1,262,228 restricted shares of the Company's common stock at the then market price of $31.69, which will vest in the same manner as the February 8, 2012 restricted stock grant received by Mr. Madden pursuant to the amended agreement. (See Note Q to the Condensed Consolidated Financial Statements.) Accordingly, Mr. Madden's annual base salary was reduced as described above. In addition to the opportunity for cash bonuses at the sole discretion of the Board of Directors, Mr. Madden’s employment agreement entitles him to an annual life insurance premium payment as well as an annual stock option grant and the potential for an additional one-time stock option grant based on achievement of certain financial performance criteria. The employment agreement also provides for the elimination of interest accrued after December 31, 2011 on an outstanding loan in the original principal amount of $3,000 made by the Company to Mr. Madden, the extension of the maturity date of such loan until December 31, 2023, and the forgiveness of 1/10th of the principal amount of the loan, together with accrued interest, annually over a ten-year period commencing on December 31, 2014 for so long as Mr. Madden continues to be employed by the Company on each such December 31. As a result of the elimination of further interest accumulation, the outstanding principal and the accrued interest as of December 31, 2011 has been discounted to reflect imputed interest, which will be amortized over the remaining life of the loan.

We have employment agreements with certain executive officers, which provide for the payment of compensation aggregating approximately $698 during the remaining three months of 2012, $1,580 in 2013 and $555 in 2014. In addition, some of the employment agreements provide for a discretionary bonus and some provide for incentive compensation based on various performance criteria as well as other benefits including stock options.

In connection with our acquisition of SM Canada on February 21, 2012, we are subject to potential earn-out payments to the seller of SM Canada based on the annual performance of SM Canada for each of the twelve-month periods ending on March 31, 2013 through 2017, inclusive. In connection with our acquisition of Cejon on May 25, 2011, we are subject to potential earn-out payments to the seller of Cejon based on the annual performance of Cejon for each of the twelve-month periods ending on June 30, 2012 through 2016, inclusive. The first such payment was made in the third quarter of this year. In connection with our acquisition of Topline on May 20, 2011, we are subject to potential earn-out payments to the seller of Topline based on the performance of Topline for the twelve-month period ended June 30, 2012. In connection with our acquisition of Big Buddha during the first fiscal quarter of 2010, we are subject to potential earn-out payments to the seller of Big Buddha based on the annual performance of Big Buddha for each of the twelve month periods ending on March 31, 2013.

Virtually all of our products are produced at overseas locations, the majority of which are located in China, with a small and growing percentage located in Mexico in addition to smaller amounts in Brazil, The Philippines, The Netherlands and India. We have not entered into any long-term manufacturing or supply contracts with any of these foreign manufacturers. We believe that a sufficient number of alternative sources exist outside of the United States for the manufacture of our products. We currently make approximately 99% of our purchases in US dollars.

INFLATION

We do not believe that the inflation experienced over the last few years in the United States, where we primarily compete, has had a significant effect on our sales or profitability. Historically, we have minimized the impact of product cost increases by improving operating efficiencies, changing suppliers and increasing prices. However, no assurance can be given that we will be able to offset such inflationary cost increases in the future.

OFF BALANCE SHEET ARRANGEMENTS

The Company has no off balance sheet arrangements.

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CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. Estimates by their nature are based on judgments and available information. Our estimates are made based upon historical factors, current circumstances and the experience and judgment of management. Assumptions and estimates are evaluated on an ongoing basis and we may employ outside experts to assist in evaluations. Therefore, actual results could materially differ from those estimates under different assumptions and conditions. Management believes the following critical accounting estimates are more significantly affected by judgments and estimates used in the preparation of our Condensed Consolidated Financial Statements: allowance for bad debts, returns, and customer chargebacks; inventory valuation; valuation of intangible assets and litigation reserves.

Allowances for bad debts, returns and customer chargebacks. We provide reserves against our trade accounts receivables for future customer chargebacks, co-op advertising allowances, discounts, returns and other miscellaneous deductions that relate to the current period. The reserve against our non-factored trade receivables also includes estimated losses that may result from customers’ inability to pay. The amount of the reserve for bad debts, returns, discounts and compliance chargebacks are determined by analyzing aged receivables, current economic conditions, the prevailing retail environment and historical dilution levels for customers. We evaluate anticipated customer markdowns and advertising chargebacks by reviewing several performance indicators for our major customers. These performance indicators (which include inventory levels at the retail floors, sell through rates and gross margin levels) are analyzed by management to estimate the amount of the anticipated customer allowance. Failure to correctly estimate the amount of the reserve could materially impact our results of operations and financial position.

Inventory valuation. Inventories are stated at lower-of-cost or market, on a first-in, first-out basis. We review inventory on a regular basis for excess and slow moving inventory. The review is based on an analysis of inventory on hand, prior sales, and expected net realizable value through future sales. The analysis includes a review of inventory quantities on hand at period-end in relation to year-to-date sales and projections for sales in the foreseeable future as well as subsequent sales. We consider quantities on hand in excess of estimated future sales to be at risk for market impairment. The net realizable value, or market value, is determined based on the estimate of sales prices of such inventory through off-price or discount store channels. The likelihood of any material inventory write-down is dependent primarily on the expectation of future consumer demand for our product. A misinterpretation or misunderstanding of future consumer demand for our product, the economy, or other failure to estimate correctly, in addition to abnormal weather patterns, could result in inventory valuation changes, compared to the valuation determined to be appropriate as of the balance sheet date.

Valuation of intangible assets. Accounting Standards Codification (“ASC”) Topic 350, “Intangible – Goodwill and Other”, requires that goodwill and intangible assets with indefinite lives no longer be amortized, but rather be tested for impairment at least annually. This pronouncement also requires that intangible assets with finite lives be amortized over their respective lives to their estimated residual values, and reviewed for impairment in accordance with ASC Topic 360, “Property, Plant and Equipment” (“ASC Topic 360”). In accordance with ASC Topic 360, long-lived assets, such as property, equipment, leasehold improvements and intangible assets subject to amortization, are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Litigation reserves. Estimated amounts for litigation claims that are probable and can be reasonably estimated are recorded as liabilities in our Condensed Consolidated Financial Statements. The likelihood of a material change in these estimated reserves would be dependent on new claims as they may arise and the favorable or unfavorable events of a particular litigation. As additional information becomes available, management will assess the potential liability related to the pending litigation and revise its estimates. Such revisions in management’s estimates of a contingent liability could materially impact our results of operation and financial position. 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

($ in thousands)

We do not engage in the trading of market risk sensitive instruments in the normal course of business. Our financing arrangements are subject to variable interest rates, primarily based on the prime rate and LIBOR. The terms of our collection agency agreements with Rosenthal & Rosenthal, Inc. can be found in the Liquidity and Capital Resources section of Item 2 and in Note D to the Condensed Consolidated Financial Statements included in this Quarterly Report.

30

As of September 30, 2012, we held marketable securities valued at $89,428, which consist primarily of corporate bonds and marketable equity securities. The values of these securities may fluctuate as a result of changes in equity values, market interest rates and credit risk. We have the ability to hold these investments until maturity. In addition, any decline in interest rates would be expected to reduce our interest income.

ITEM 4. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were, as of the end of the fiscal quarter covered by this quarterly report, effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated our internal controls over financial reporting to determine whether any changes occurred during the quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

($ in thousands)

On July 19, 2011, an individual purporting to act on behalf of a class of similarly situated individuals commenced a civil action in the United States District Court for the Central District of California, Samantha Ellison, individually and on behalf of a class of similarly situated individuals v. Steven Madden, Ltd., No. CV11-05935 (the “Ellison Action”). The Ellison Action asserts that the Company made unsolicited commercial text calls to wireless telephone numbers of the class in violation of the Telecommunications Privacy Act and seeks, on behalf of the class, an injunction requiring the Company to cease all wireless spam activities and an award of statutory damages to the class members together with costs and reasonable attorneys' fees. The Company responded by challenging the suit on several grounds. Settlement discussions have resulted in a settlement being reached on July 30, 2012 for an aggregate gross fund amount of $10,000, including all settlement costs and administration fees, as well as the fees recoverable by class counsel. As the settlement calls for the reversion of all monies not paid to class claimants, it is possible that the actual settlement amount paid will be substantially less than $10,000. In addition, the Company's insurance coverage will cover a portion of the settlement at the rate of 45% of the initial settlement payment of $5,000 and 30% of amounts over and above the initial settlement payment. On September 25, 2012, the court certified the class for settlement purposes only and approved the settlement on a preliminary basis. The court further ordered all litigants to make further submissions to the court concerning, among other thing, the merits and value of the case and to deliver notice of the proposed settlement to all class members prior to a fairness hearing and final approval of the settlement. Based on the settlement as contemplated and applying the insurance coverage as applicable, the maximum exposure to the Company is approximately $6,250, however, in light of historical "take rates" in cases of this type, counsel estimates that the actual liability to the Company will be between approximately $2,000 and $2,500. Accordingly, the Company has recorded a liability in the amount of $2,500 in the nine months ended September 30, 2012. This liability is subject to change to reflect any change in the status of this matter.

On February 2, 2012, two individuals purporting to be stockholders of the Company commenced separate civil actions in the Supreme Court of New York, Queens County, Mark Ioffe, Derivatively on Behalf of Nominal Defendant Steven Madden, Ltd. v. Steven Madden, et. al, No. 700188-2012 (the “Ioffe Action”) and Catherine L. Phillips, Derivatively on Behalf of Nominal Defendant Steven Madden, Ltd. v. Steven Madden, et. al, No. 700189-2012 (together with the Ioffe Action, the “Actions”). The Actions assert derivative claims challenging the decision of the Company’s Board of Directors in January 2012 to amend Steven Madden’s employment agreement dated July 15, 2005, and amended as of December 14, 2009 (the “Madden Employment Agreement”) and to amend the promissory note (the “Promissory Note”) setting forth Mr. Madden’s obligations in respect of a loan made by the Company to Mr. Madden in 2007 and amended in 2009. The Actions assert that the Board violated its duties of loyalty and good faith by approving the amendments to the Madden Employment Agreement and the Promissory Note and that the changes set forth in the amendments constitute a waste of corporate assets. The Actions also assert claims of unjust enrichment against Mr. Madden. The Actions seek, on behalf of the Company, disgorgement of any compensation that Mr. Madden has received

31

as a result of the amended Madden Employment Agreement, an award of damages to the Company, and a declaration that the amendments of the Madden Employment Agreement and the Promissory Note are void. The Company and the other defendants filed a motion for dismissal of the Actions based on, among other things, the plaintiffs’ failure to make a demand that the Company’s Board of Directors investigate their claims. On September 13, 2012, the court granted the defendants' motion to dismiss the actions. As of the date hereof, the plaintiffs have not filed a notice of appeal with respect to the dismissal of the Actions.

The Company is named as a defendant in certain lawsuits in the normal course of business. In the opinion of management, after consulting with legal counsel, the liabilities, if any, resulting from these matters should not have a material effect on our financial position or results of operations. It is the policy of management to disclose the amount or range of reasonably possible losses in excess of recorded amounts.  

32

ITEM 6. EXHIBITS

23.1	Consent of EisnerAmper LLP, an independent public accounting firm (incorporated by reference to Exhibit 23.1 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on October 24, 2012)
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101	The following materials from Steven Madden, Ltd.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text*

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.

33

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

DATE: November 8, 2012

STEVEN MADDEN, LTD.

/s/ EDWARD R. ROSENFELD

Edward R. Rosenfeld

Chairman and Chief Executive Officer

/s/ ARVIND DHARIA

Arvind Dharia

Chief Financial Officer and Chief Accounting Officer

34

Exhibit Index

23.1	Consent of EisnerAmper LLP, an independent public accounting firm (incorporated by reference to Exhibit 23.1 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on October 24, 2012)
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101	The following materials from Steven Madden, Ltd.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text*

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.

35

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Edward R. Rosenfeld, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Steven Madden, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ EDWARD R. ROSENFELD

Edward R. Rosenfeld

Chairman and Chief Executive Officer

November 8, 2012

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Arvind Dharia, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Steven Madden, Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ ARVIND DHARIA

Arvind Dharia

Chief Financial Officer and Chief Accounting Officer

November 8, 2012

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Steven Madden, Ltd. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward R. Rosenfeld, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ EDWARD R. ROSENFELD

Edward R. Rosenfeld

Chairman and Chief Executive Officer

November 8, 2012

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Steven Madden, Ltd. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Arvind Dharia, Chief Financial Officer and Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ARVIND DHARIA

Arvind Dharia

Chief Financial Officer and Chief Accounting Officer

November 8, 2012

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Fair Value Measurement (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended			3 Months Ended			3 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Aug. 26, 2010 Note Receivable Fair Value From Bakers [Member]	Sep. 30, 2012 Note Receivable From Bakers [Member]	Sep. 30, 2011 Note Receivable From Bakers [Member]	Aug. 26, 2010 Note Receivable From Bakers [Member]	Sep. 30, 2012 Accounts Receivable [Member]	Sep. 30, 2012 Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2011 Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2012 Estimate of Fair Value, Fair Value Disclosure [Member] Note Receivable From Bakers [Member]
Unregistered Shares Of Common Stock Acquired				1,844,860			1,844,860
Security Owned Not Readily Marketable, Fair Value									$ 0	$ 996	$ 996
Financing Receivable, Gross					4,148	4,074					4,148
Accounts Receivable, Net, Current								852
Other than Temporary Impairment Losses, Investments					996
Tangible Asset Impairment Charges	1,810				4,148
Provision for Doubtful Accounts		$ 2,249	$ 4,352					$ 852

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Goodwill and Intangible Assets Goodwill and Intangible Assets (detail) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Wholesale Footwear [Member]
Goodwill [Line Items]
Goodwill, Purchase Accounting Adjustments	$ 11,610
Wholesale Accessories [Member]
Goodwill [Line Items]
Goodwill, Purchase Accounting Adjustments	$ 169

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Stock-Based Compensation (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended		15 Months Ended
	Jul. 03, 2012	Feb. 08, 2012	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Options Vested In Period			65,000	745,000	697,000	86,000
Share Based Compensation Arrangement By Share Based Payment Award Options Exercisable During Period Weighted Average Exercise Price (in Dollars per share)			$ 28.82	$ 18.53	$ 15.23	$ 24.61
Share Based Compensation Arrangement By Share-Based Payment Award Equity Options Nonvested Number			1,269,000	1,269,000		1,269,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized			$ 7,845	$ 7,845		$ 7,845
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition				2 years 1 month
Employee Service Share Based Compensation Nonvested Restricted Stock Awards Total Compensation Cost Not Yet Recognized			$ 92,431	$ 92,431		$ 92,431
Employee Service Share Based Compensation Nonvested Restricted Awards Total Compensation Cost Not Yet Recognized Period For Recognition				10 years 1 month
Related Party Transaction Restricted Shares Granted During The Period	1,262,228	975,371
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Price		41.01
Subsequent Event [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Price	31.69

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Commitments, Contingencies and Other (Detail) (USD $) In Thousands, unless otherwise specified	7 Months Ended
	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2010	Dec. 31, 2009	Sep. 30, 2007
Loss Contingencies [Line Items]
Loss Contingency, Range of Possible Loss, Maximum		$ 6,250
Loss Contingency, Range of Possible Loss, Minimum		2,000
July 19, 2011 litigation [Member]
Loss Contingencies [Line Items]
Gross fund amount of settlement		10,000
Loss Contingency, Estimate of Possible Loss		2,500
Estimated Litigation Liability		2,500
Percent of litigation covered by insurance of initial settlement		45.00%
Insurance Settlements Receivable		5,000
Percent of insurance reovery beyond innitial settlement		30.00%
US Customs action [Member]
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss					1,400
Loss Contingency, Range of Possible Loss, Maximum		1,700		3,045
Loss Contingency Accrual, at Carrying Value		1,248	1,248
Payments for Other Taxes	342
Tax Penalties From Examination	$ 1,367

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Stock-Based Compensation (Detail) - (Table 5) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at January 1, 2012	2,703,000
Outstanding at January 1, 2012 (in Dollars per share)	$ 17.79
Granted	213,000
Granted (in Dollars per share)	$ 40.30
Exercised	(423,000)
Exercised (in Dollars per share)	$ 16.51
Cancelled/Forfeited	(39,000)
Outstanding at June 30, 2012	2,454,000
Outstanding at June 30, 2012 (in Dollars per share)	$ 19.96
Outstanding at June 30, 2012	4 years 2 months
Outstanding at June 30, 2012 (in Dollars)	$ 58,312
Exercisable at June 30, 2012	1,185,000
Exercisable at June 30, 2012 (in Dollars per share)	$ 16.94
Exercisable at June 30, 2012	3 years 9 months
Exercisable at June 30, 2012 (in Dollars)	$ 31,732
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 17.67

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Due To and From Factor (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended	9 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Sep. 30, 2012
Due To and From Factor [Abstract]
Line of Credit Facility, Collateral			.85
Line of Credit Facility, Maximum Borrowing Capacity	$ 30		$ 30
Letters Of Credit SubLimit Capacity Amount			$ 15
Factoring Fee	0.25%	0.275%

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Operating Segment Information (Detail) - (Table 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Segment Reporting [Abstract]
Domestic	$ 327,965	$ 847,020	$ 650,408	$ 297,873
International	28,918	64,525	38,386	16,014
Total	$ 356,883	$ 911,545	$ 688,794	$ 313,887

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Operating Segment Information

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Operating Segment Information

Operating Segment Information

The Company operates the following business segments: Wholesale Footwear, Wholesale Accessories, Retail, First Cost and Licensing. The Wholesale Footwear segment, through sales to department stores, mid-tier retailers, mass merchants and specialty stores, derives revenue, both domestically and worldwide through our international business, from sales of branded and private label women’s, men’s, girls’ and children’s footwear. The Wholesale Accessories segment, which includes branded and private label handbags, belts and small leather goods as well as cold weather and selected other fashion accessories, derives revenue from sales to department stores, mid-tier retailers, mass merchants and specialty stores, domestically and worldwide through our international business. Our Wholesale Footwear and Wholesale Accessories segments international business derive revenue from Canada and, under special distribution arrangements, from Asia, Europe, the Middle East, Mexico, Australia, India and Central and South America. The Retail segment, through the operation of Company-owned retail stores in the United States and Canada and the Company’s websites, derives revenue from sales of branded women’s, men’s and children’s footwear, accessories and licensed products to consumers. The First Cost segment represents activities of a subsidiary which earns commissions for serving as a buying agent of footwear products to mass-market merchandisers, mid-tier department stores and other retailers with respect to their purchase of footwear. In the Licensing segment, the Company licenses its Steve Madden® and Steven by Steve Madden® trademarks and other trademark rights for use in connection with the manufacture, marketing and sale of sunglasses, eyewear, outerwear, bedding, hosiery and sleepwear. In addition, this segment licenses the Betsey Johnson® trademarks for use in connection with the manufacture, marketing and sale of sleepwear, jewelry, swimwear, eyewear, watches, fragrances, outerwear and luggage.

Note T – Operating Segment Information (continued)

As of and three months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail		First Cost		Licensing		Corporate		Consolidated
September 30, 2012:
Net sales to external customers	$	228,720	$	82,818	$	311,538	$	45,345							$	356,883
Gross profit	75,785		27,918		103,703		27,512								131,215
Commissions and licensing fees – net	—		—		—		—		$	2,157	$	1,718			3,875
Income from operations	38,357		15,089		53,446		4,196		2,157		1,718		(5,144	)	56,373
Segment assets	$	488,937	$	167,127	656,064		86,085		53,159		—				795,308
Capital expenditures					$	3,441	$	4,146	$	—	$	—			$	7,587
September 30, 2011:
Net sales to external customers	$	211,223	$	67,030	$	278,253	$	35,634							$	313,887
Gross profit	66,652		21,973		88,625		20,828								109,453
Commissions and licensing fees – net	—		—		—		—		$	3,318	$	2,331			5,649
Income from operations	31,616		10,974		42,590		2,269		3,318		2,331		—		50,508
Segment assets	$	374,329	$	157,369	531,698		69,242		50,074		—				651,014
Capital expenditures					$	4,558	$	1,715	$	—	$	—			$	6,273

As of and nine months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail		First Cost		Licensing		Corporate		Consolidated
September 30, 2012:
Net sales to external customers	$	618,914	$	169,700	$	788,614	$	122,931							$	911,545
Gross profit	193,964		62,000		255,964		75,598								331,562
Commissions and licensing fees – net	—		—		—		—		$	6,897	$	5,703			12,600
Income from operations	86,537		28,914		115,451		10,629		6,897		5,703		(9,454	)	129,226
Segment assets	$	488,937	$	167,127	656,064		86,085		53,159		—				795,308
Capital expenditures					$	5,574	$	10,043	$	—	$	—			$	15,617
September 30, 2011:
Net sales to external customers	$	468,204	$	119,480	$	587,684	$	101,110							$	688,794
Gross profit	159,315		42,213		201,528		61,152								262,680
Commissions and licensing fees – net	—		—		—		—		$	8,605	$	6,043			14,648
Income from operations	73,713		18,620		92,333		8,170		8,605		6,043		—		115,151
Segment assets	$	374,329	$	157,369	531,698		69,242		50,074		—				651,014
Capital expenditures					$	8,195	$	4,051	$	—	$	—			$	12,246

Note T – Operating Segment Information (continued)

Revenues by geographic area for the three- and nine-month periods ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Domestic	$	327,965	$	297,873	$	847,020	$	650,408
International	28,918		16,014		64,525		38,386
Total	$	356,883	$	313,887	$	911,545	$	688,794

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Acquisitions (Detail) In Thousands, unless otherwise specified	4 Months Ended	9 Months Ended				12 Months Ended			12 Months Ended
	Jun. 30, 2012 SM Canada [Member] USD ($)	Sep. 30, 2012 SM Canada [Member] USD ($)	Mar. 31, 2012 SM Canada [Member] USD ($)	Mar. 31, 2012 SM Canada [Member] CAD	Feb. 21, 2012 SM Canada [Member] CAD	Dec. 31, 2011 Cejon Acquisition [Member] USD ($)	Sep. 30, 2012 Cejon Acquisition [Member]	May 25, 2011 Cejon Acquisition [Member] USD ($)	Dec. 31, 2011 Topline Acquisition [Member] USD ($)	May 20, 2011 Topline Acquisition [Member] USD ($)
Business Acquisition, Cost of Acquired Entity, Cash Paid					29,367			$ 29,502		$ 56,128
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High				38,000				25,000
Business Acquisition, Contingent Consideration, at Fair Value		19,975
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Years		15					15
Business Combination, Acquisition Related Costs	951	800				531			529
Financing Receivable, Gross			3,085	3,107
Business Combination Contingent Consideration Arrangements Range Of Perfomance Indicators Value High								11,000
Business Combination Contingent Consideration Arrangements Range Of Outcomes Value High Tier Two								$ 33,000

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Stock-Based Compensation (Detail) - (Table 1)	9 Months Ended
	Sep. 30, 2012	May 25, 2012	May 22, 2009	May 27, 2007	May 26, 2006
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Common stock authorized	15,644,000	15,644,000	9,144,000	3,487,500	2,700,000
Stock-based awards, including restricted stock and stock options granted, net of expired or cancelled	(11,089,000)
Common stock available for grant of stock-based awards as of June 30, 2012	4,555,000

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Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Marketable Securities [Abstract]
Investment Income, Amortization of Premium	$ 182	$ 710	$ 898	$ 234

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Goodwill and Intangible Assets (Detail) - (Table 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Re-acquired right [Member]
Estimated Lives	indefinite
Cost Basis	$ 35,200
Accumulated amortization	0
Net Carrying Amount	35,200
Trademarks [Member]
Estimated Lives	indefinite
Cost Basis	76,888
Accumulated amortization	0
Net Carrying Amount	76,888
Total [Member]
Cost Basis	151,966
Accumulated amortization	15,466
Net Carrying Amount	136,500
Trade names [Member]
Cost Basis	4,590
Accumulated amortization	1,509
Net Carrying Amount	3,081
Customer relationships [Member]
Estimated Lives	10 years
Cost Basis	27,234
Accumulated amortization	6,897
Net Carrying Amount	20,337
Licensing agreements [Member]
Cost Basis	5,600
Accumulated amortization	5,600
Net Carrying Amount	0
Non-compete agreement [Member]
Estimated Lives	5 years
Cost Basis	2,440
Accumulated amortization	1,446
Net Carrying Amount	994
Other [Member]
Estimated Lives	3 years
Cost Basis	14
Accumulated amortization	14
Net Carrying Amount	0
Total [Member]
Cost Basis	39,878
Accumulated amortization	15,466
Net Carrying Amount	$ 24,412
Minimum [Member] | Trade names [Member]
Estimated Lives	6
Minimum [Member] | Licensing agreements [Member]
Estimated Lives	3
Maximum [Member] | Trade names [Member]
Estimated Lives	10
Maximum [Member] | Licensing agreements [Member]
Estimated Lives	6

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Stock-Based Compensation (Detail) - (Table 6) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-vested at January 1	671,000	563,000
Non-vested at January 1 (in Dollars per share)	$ 25.44	$ 17.20
Granted	2,409,000	334,000
Granted (in Dollars per share)	$ 36.22	$ 31.34
Vested	(172,000)	(179,000)
Vested (in Dollars per share)	$ 25.11	$ 14.93
Non-vested at June 30	2,906,000	718,000
Non-vested at June 30 (in Dollars per share)	$ 34.39	$ 24.34
Forfeited	(2,000)	0
Forfeitures (in dollars per share)	$ 38.10	$ 0

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Use of Estimates

9 Months Ended

Sep. 30, 2012

Use of Estimates [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Significant areas involving management estimates include allowances for bad debts, returns and customer chargebacks and contingent payment liability. The Company provides reserves on trade accounts receivables and due from factors for future customer chargebacks and markdown allowances, discounts, returns and other miscellaneous compliance related deductions that relate to the current period sales. The Company evaluates anticipated chargebacks by reviewing several performance indicators of its major customers. These performance indicators, which include retailers’ inventory levels, sell-through rates and gross margin levels, are analyzed by management to estimate the amount of the anticipated customer allowance.

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Stock-Based Compensation (Detail) - (Table 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Total	$ 4,711	$ 12,660	$ 8,337	$ 2,772
Restricted Stock [Member]
Allocated Share-based Compensation Expense	3,319	8,177	4,050	1,093
Stock Options [Member]
Allocated Share-based Compensation Expense	$ 1,392	$ 4,483	$ 4,287	$ 1,679

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule Of Share Based Compensation Shares Authorized Under Stock Plans Issued And Avaliability

The following table summarizes the number of shares of common stock authorized for use under the Plan, the number of stock-based awards granted (net of expired or cancelled awards) under the Plan and the number of shares of common stock available for the grant of stock-based awards under the Plan:

Common stock authorized	15,644,000
Stock-based awards, including restricted stock and stock options granted, net of expired or cancelled	(11,089,000	)
Common stock available for grant of stock-based awards as of September 30, 2012	4,555,000

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Total equity-based compensation for the three and nine months ended September 30 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Restricted stock	$	3,319	$	1,093	$	8,177	$	4,050
Stock options	1,392		1,679		4,483		4,287
Total	$	4,711	$	2,772	$	12,660	$	8,337

Schedule Of Cash Proceeds And Intrinsic Values For Stock Options Exercised

Cash proceeds and intrinsic values related to total stock options exercised during the three- and nine-month periods ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Proceeds from stock options exercised	$	2,040	$	520	$	6,991	$	4,005
Intrinsic value of stock options exercised	$	4,213	$	1,062	$	12,445	$	8,861

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used

The following weighted average assumptions were used for stock options granted:

	2012	2011
Volatility	41.1% to 47.4%	47.3% to 48.7%
Risk free interest rate	0.47% to 0.87%	0.61% to 1.78%
Expected life in years	3.1 to 4.6	2.8 to 4.4
Dividend yield	0.00%	0.00%
Weighted average fair value	$14.05	$10.91

Schedule of Share-based Compensation, Stock Options, Activity

Activity relating to stock options granted under the Company’s plans and outside the plans during the nine months ended September 30, 2012 is as follows: 

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2012	2,703,000		$	17.79
Granted	213,000		40.30
Exercised	(423,000	)	16.51
Cancelled/Forfeited	(39,000	)	17.67
Outstanding at September 30, 2012	2,454,000		$	19.96	4.2 years	$	58,312
Exercisable at September 30, 2012	1,185,000		$	16.94	3.8 years	$	31,732

Schedule of Nonvested Share Activity

The following table summarizes restricted stock activity during the nine months ended September 30, 2012 and 2011:

	2012				2011
	Number of Shares		Weighted Average Fair Value at Grant Date		Number of Shares		Weighted Average Fair Value at Grant Date
Non-vested at January 1	671,000		$	25.44	563,000		$	17.20
Granted	2,409,000		36.22		334,000		31.34
Vested	(172,000	)	25.11		(179,000	)	14.93
Forfeited	(2,000	)	38.10		—		—
Non-vested at September 30	2,906,000		$	34.39	718,000		$	24.34

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Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities

The Company’s financial assets and liabilities subject to fair value measurements as of September 30, 2012 and December 31, 2011 are as follows: 

Note H – Fair Value Measurement (continued)

			September 30, 2012
			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	5,492	$	5,492	$	—	$	—
Current marketable securities – available for sale	9,964		9,964		—		—
Investment in Bakers	—		—		—		—
Note receivable – related party	3,561		—		—		3,561
Note receivable – Bakers	—		—		—		—
Note receivable – Betsey Johnson	500		—		—		500
Note receivable – Seller of SM Canada	3,085		—		—		3,085
Long-term marketable securities – available for sale	79,464		79,464		—		—
Total assets	$	102,066	$	94,920	$	—	$	7,146
Liabilities:
Contingent consideration	$	57,751	—		—		$	57,751
Total liabilities	$	57,751	—		—		$	57,751

			December 31, 2011
			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	57,652	$	57,652	$	—	$	—
Current marketable securities – available for sale	5,659		5,659		—		—
Investment in Bakers	996		—		996		—
Note receivable – related party	4,090		—		—		4,090
Note receivable – Bakers	4,092		—		—		4,092
Note receivable – Betsey Johnson	3,309		—		—		3,309
Long-term marketable securities – available for sale	72,004		72,004		—		—
Total assets	$	147,802	$	135,315	$	996	$	11,491
Liabilities:
Contingent consideration	$	37,921	—		—		$	37,921
Total liabilities	$	37,921	—		—		$	37,921

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Operating Segment Information (Detail) - (Table 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
June 30, 2012:
Net sales to external customers	$ 356,883	$ 911,545	$ 688,794	$ 313,887
Gross profit	131,215	331,562	262,680	109,453
Commissions and licensing fees – net	3,875	12,600	14,648	5,649
Income from operations	56,373	129,226	115,151	50,508
Segment assets	795,308	795,308	651,014	795,308
Capital expenditures	7,587	15,617	12,246	6,273
Wholesale Footwear [Member]
June 30, 2012:
Net sales to external customers	228,720	618,914	468,204	211,223
Gross profit	75,785	193,964	159,315	66,652
Commissions and licensing fees – net	0	0	0	0
Income from operations	38,357	86,537	73,713	31,616
Segment assets	488,937	488,937	374,329	488,937
Wholesale Accessories [Member]
June 30, 2012:
Net sales to external customers	82,818	169,700	119,480	67,030
Gross profit	27,918	62,000	42,213	21,973
Commissions and licensing fees – net	0	0	0	0
Income from operations	15,089	28,914	18,620	10,974
Segment assets	167,127	167,127	157,369	167,127
Total Wholesale [Member]
June 30, 2012:
Net sales to external customers	311,538	788,614	587,684	278,253
Gross profit	103,703	255,964	201,528	88,625
Commissions and licensing fees – net	0	0	0	0
Income from operations	53,446	115,451	92,333	42,590
Segment assets	656,064	656,064	531,698	656,064
Capital expenditures	3,441	5,574	8,195	4,558
Retail [Member]
June 30, 2012:
Net sales to external customers	45,345	122,931	101,110	35,634
Gross profit	27,512	75,598	61,152	20,828
Commissions and licensing fees – net	0	0	0	0
Income from operations	4,196	10,629	8,170	2,269
Segment assets	86,085	86,085	69,242	86,085
Capital expenditures	4,146	10,043	4,051	1,715
First Cost Member
June 30, 2012:
Commissions and licensing fees – net	2,157	6,897	8,605	3,318
Income from operations	2,157	6,897	8,605	3,318
Segment assets	53,159	53,159	50,074	53,159
Capital expenditures	0	0	0	0
Licensing [Member]
June 30, 2012:
Commissions and licensing fees – net	1,718	5,703	6,043	2,331
Income from operations	1,718	5,703	6,043	2,331
Segment assets	0	0	0	0
Capital expenditures	0	0	0	0
Corporate [Member]
June 30, 2012:
Income from operations	$ (5,144)	$ (9,454)	$ 0	$ 0

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Stock-Based Compensation (Detail) - (Table 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Proceeds from stock options exercised	$ 2,040	$ 6,991	$ 4,005	$ 520
Intrinsic value of stock options exercised	$ 4,213	$ 12,445	$ 8,861	$ 1,062

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2012

SM Canada [Member]

Schedule of Purchase Price Allocation [Table Text Block]

The purchase price has been preliminarily allocated as follows: 

Accounts receivable	$	2,496
Inventory	2,220
Prepaid expenses and other assets	147
Fixed assets	1,005
Re-acquired right	35,200
Customer relationships	4,400
Non-compete agreement	455
Accounts payable	(2,645		)
Accrued expenses	(802		)
Total fair value excluding goodwill	42,476
Goodwill	4,185
Net assets acquired	$	46,661

Cejon Acquisition [Member]

Schedule of Purchase Price Allocation [Table Text Block]

The purchase price has been allocated as follows:

Accounts receivable	$	3,631
Inventory	3,998
Prepaid expenses and other current assets	196
Fixed assets	190
Trade name	27,065
Customer relationships	3,225
Non-compete agreement	305
Other assets	24
Accounts payable	(1,318		)
Accrued expenses	(2,242		)
Total fair value excluding goodwill	35,074
Goodwill	17,759
Net assets acquired	$	52,833

Topline Acquisition [Member]

Schedule of Purchase Price Allocation [Table Text Block]

The purchase price, net of an estimated working capital adjustment due to the Company, has been allocated as follows:

Accounts receivable	$	55,950
Inventory	8,460
Prepaid expenses and other current assets	990
Fixed assets	3,895
Trade name	16,600
Customer relationships	7,900
Non-compete agreement	300
Other assets	108
Accounts payable	(40,475		)
Accrued expenses	(7,784		)
Income tax payable	(3,082		)
Deferred tax liability	(8,491		)
Total fair value excluding goodwill	34,371
Goodwill	31,003
Net assets acquired	$	65,374

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following is a summary of the carrying amount of goodwill by segment as of September 30, 2012:

	Wholesale					Net Carrying
	Footwear		Accessories		Retail	Amount
Balance at January 1, 2012	$	20,939	$	49,155	5,501	$	75,595
Purchase accounting adjustment	11,610		169		—	11,779
Acquisition of SM Canada	2,971		—		1,214	4,185
Balance at September 30, 2012	$	35,520	$	49,324	6,715	$	91,559

Schedule of Indentifiable Intangible Assets

The following table details identifiable intangible assets as of September 30, 2012:

	Estimated Lives	Cost Basis		Accumulated Amortization		Net Carrying Amount
Trade names	6–10 years	$	4,590	$	1,509	$	3,081
Customer relationships	10 years	27,234		6,897		20,337
License agreements	3–6 years	5,600		5,600		—
Non-compete agreement	5 years	2,440		1,446		994
Other	3 years	14		14		—
		39,878		15,466		24,412
Re-acquired right	indefinite	35,200		—		35,200
Tradenames	indefinite	76,888		—		76,888
		$	151,966	$	15,466	$	136,500

Schedule of Intangible Assets, Future Amortization Expense

The estimated future amortization expense of purchased intangibles as of September 30, 2012 is as follows:

2012 (remaining three months)	$	838
2013	3,351
2014	3,286
2015	3,101
2016	2,795
Thereafter	11,041
	$	24,412

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Recently Adopted Accounting Standards

9 Months Ended

Sep. 30, 2012

Recently Adopted Accounting Standards [Abstract]

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-08, “Intangibles – Goodwill and Other” (“ASU 2011-08”). Under ASU 2011-08, when testing goodwill for impairment, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If an entity believes, as a result of its qualitative assessment that the fair value of a reporting unit is less than its carrying amount, performing the current two-step impairment test is not required. The guidance also includes a number of events and circumstances that an entity should consider in conducting the qualitative assessment. The adoption of this guidance, which became effective for the Company on January 1, 2012, did not have a material impact on our financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). Under ASU No. 2011-05, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of which option is selected, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU No. 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-05 which became effective for the Company on January 1, 2012, only affected the presentation of financial statements and thus had no impact on the financial results or financial position. In October 2011, the FASB announced plans to defer the presentation of items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income.

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Operating Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

As of and three months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail		First Cost		Licensing		Corporate		Consolidated
September 30, 2012:
Net sales to external customers	$	228,720	$	82,818	$	311,538	$	45,345							$	356,883
Gross profit	75,785		27,918		103,703		27,512								131,215
Commissions and licensing fees – net	—		—		—		—		$	2,157	$	1,718			3,875
Income from operations	38,357		15,089		53,446		4,196		2,157		1,718		(5,144	)	56,373
Segment assets	$	488,937	$	167,127	656,064		86,085		53,159		—				795,308
Capital expenditures					$	3,441	$	4,146	$	—	$	—			$	7,587
September 30, 2011:
Net sales to external customers	$	211,223	$	67,030	$	278,253	$	35,634							$	313,887
Gross profit	66,652		21,973		88,625		20,828								109,453
Commissions and licensing fees – net	—		—		—		—		$	3,318	$	2,331			5,649
Income from operations	31,616		10,974		42,590		2,269		3,318		2,331		—		50,508
Segment assets	$	374,329	$	157,369	531,698		69,242		50,074		—				651,014
Capital expenditures					$	4,558	$	1,715	$	—	$	—			$	6,273

As of and nine months ended,	Wholesale Footwear		Wholesale Accessories		Total Wholesale		Retail		First Cost		Licensing		Corporate		Consolidated
September 30, 2012:
Net sales to external customers	$	618,914	$	169,700	$	788,614	$	122,931							$	911,545
Gross profit	193,964		62,000		255,964		75,598								331,562
Commissions and licensing fees – net	—		—		—		—		$	6,897	$	5,703			12,600
Income from operations	86,537		28,914		115,451		10,629		6,897		5,703		(9,454	)	129,226
Segment assets	$	488,937	$	167,127	656,064		86,085		53,159		—				795,308
Capital expenditures					$	5,574	$	10,043	$	—	$	—			$	15,617
September 30, 2011:
Net sales to external customers	$	468,204	$	119,480	$	587,684	$	101,110							$	688,794
Gross profit	159,315		42,213		201,528		61,152								262,680
Commissions and licensing fees – net	—		—		—		—		$	8,605	$	6,043			14,648
Income from operations	73,713		18,620		92,333		8,170		8,605		6,043		—		115,151
Segment assets	$	374,329	$	157,369	531,698		69,242		50,074		—				651,014
Capital expenditures					$	8,195	$	4,051	$	—	$	—			$	12,246

Schedule of Revenues, by Geographic Area

Revenues by geographic area for the three- and nine-month periods ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Domestic	$	327,965	$	297,873	$	847,020	$	650,408
International	28,918		16,014		64,525		38,386
Total	$	356,883	$	313,887	$	911,545	$	688,794

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Income Taxes (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Effective Income Tax Rate, Continuing Operations	35.40%	35.10%

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Goodwill and Intangible Assets (Detail) - (Table 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2012 (remaining nine months)	$ 838
2013	3,351
2014	3,286
2015	3,101
2016	2,795
Thereafter	11,041
Total	$ 24,412

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Current assets:
Cash and cash equivalents	$ 64,927	$ 102,830	$ 35,141
Accounts receivable, net of allowances of $5,342, $5,894 and $3,763	88,150	91,407	113,461
Due from factor, net of allowances of $11,609, $12,325 and $10,777	156,922	62,017	105,694
Inventories	84,044	59,644	77,042
Marketable securities – available for sale	9,964	5,659	4,159
Prepaid expenses and other current assets	21,125	15,289	14,465
Deferred taxes	9,746	9,711	9,415
Total current assets	434,878	346,557	359,377
Notes receivable	3,585	7,401	7,318
Note receivable – related party	3,561	4,090	4,028
Property and equipment, net	43,497	31,587	30,400
Deferred taxes	0	2,428	4,665
Deposits and other	2,264	1,257	1,970
Marketable securities – available for sale	79,464	72,004	72,500
Goodwill – net	91,559	75,595	74,976
Intangibles – net	136,500	98,867	95,780
Total Assets	795,308	639,786	651,014
Current liabilities:
Accounts payable	96,725	69,747	86,894
Accrued expenses	38,411	34,327	34,864
Income taxes payable	0	0	22,877
Contingent payment liability – current portion	19,255	14,133	3,787
Accrued incentive compensation	6,290	16,881	13,402
Total current liabilities	160,681	135,088	161,824
Contingent payment liability	38,496	23,788	36,236
Deferred rent	7,207	6,004	5,799
Deferred taxes	2,447	0	0
Other liabilities	123	148	154
Total Liabilities	208,954	165,028	204,013
STOCKHOLDERS’ EQUITY
Common stock – $.0001 par value, 60,000 shares authorized, 52,931, 51,408 and 51,217 shares issued, 44,528, 43,005 and 42,814 outstanding	5	5	5
Additional paid-in capital	210,274	186,325	182,292
Retained earnings	507,074	420,411	396,639
Other comprehensive income	1,697	678	740
Treasury stock – 8,403, 8,403 and 8,403 shares at cost	(132,543)	(132,543)	(132,543)
Total Steven Madden, Ltd. stockholders’ equity	586,507	474,876	447,133
Noncontrolling interests	(153)	(118)	(132)
Total stockholders’ equity	586,354	474,758	447,001
Total Liabilities and Stockholders’ Equity	795,308	639,786	651,014
Preferred Stock [Member]
STOCKHOLDERS’ EQUITY
Preferred stock – $.0001 par value, 5,000 shares authorized; none issued; Series A Junior Participating preferred stock – $.0001 par value, 60 shares authorized; none issued	$ 0	$ 0	$ 0

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Stock-Based Compensation (Detail) - (Table 4) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Weighted average fair value	$ 14.05	$ 10.91
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	41.10%	47.30%
Risk free interest rate	0.47%	0.61%
Expected life in years	3 years 1 month	2 years 9 months
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	47.40%	48.70%
Risk free interest rate	0.87%	1.78%
Expected life in years	4 years 7 months	4 years 5 months

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 86,628	$ 73,415
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Tax benefit from the exercise of options	(4,298)	(4,178)
Depreciation and amortization	9,104	7,849
Loss on disposal of fixed assets	175	609
Impairment of note receivable	6,955	0
Non-cash compensation	12,660	8,337
Provision for doubtful accounts and chargebacks	2,249	4,352
Accrued interest on note receivable – related party	529	(179)
Deferred rent expense	1,264	(556)
Realized loss (gain) on sale of marketable securities	(2,029)	(1,254)
Changes in:
Accounts receivable	5,496	(40,030)
Due from factor	(96,899)	(53,184)
Inventories	(22,180)	(25,301)
Prepaid expenses, deposits and other assets	(5,792)	(2,329)
Accounts payable and other accrued expenses	20,896	39,834
Net cash provided by (used in) operating activities	14,758	7,385
Cash flows from investing activities:
Purchases of property and equipment	(15,617)	(12,246)
Purchases of marketable securities	(48,955)	(13,983)
Purchase of note receivable	(3,085)	0
Payment of contingent liability	(7,076)	0
Sale of marketable securities	40,150	64,885
Acquisition, net of cash acquired	(29,367)	(85,234)
Net cash used in investing activities	(63,950)	(46,578)
Cash flows from financing activities:
Proceeds from exercise of stock options	6,991	4,005
Tax benefit from the exercise of options	4,298	4,178
Net cash provided by financing activities	11,289	8,183
Net decrease in cash and cash equivalents	(37,903)	(31,010)
Cash and cash equivalents – beginning of period	102,830	66,151
Cash and cash equivalents – end of period	$ 64,927	$ 35,141

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Notes Receivable (Details 1) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Aug. 26, 2010
Tangible Asset Impairment Charges	$ 1,810
Impaired Financing Receivable, with Related Allowance, Recorded Investment	500
Note receivable – Bakers [Member]
Payment To Acquire Subordinated Debenture			5,000
Subordinated Debenture Face Amount			5,000
Unregistered Shares Of Common Stock Acquired (in Shares)			1,844,860
Unregistered Shares Of Common Stock Acquired Value			996
Purchase Price Allocated To Note Receivable			4,004
Note Receivable, Interest Rate			11.00%
Receivables with Imputed Interest, Amortization Amount	145	70
Financing Receivable, Gross	4,148	4,074
Tangible Asset Impairment Charges	4,148
Other than Temporary Impairment Losses, Investments	996
August 31, 2017 [Member] | Note receivable – Bakers [Member]
Repayments Of Subordinated Debenture	1,250
August 31, 2018 [Member] | Note receivable – Bakers [Member]
Repayments Of Subordinated Debenture	1,250
August 31, 2019 [Member] | Note receivable – Bakers [Member]
Repayments Of Subordinated Debenture	1,250
August 31, 2020 [Member] | Note receivable – Bakers [Member]
Repayments Of Subordinated Debenture	$ 1,250

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Acquisitions

9 Months Ended

Sep. 30, 2012

Acquisitions [Abstract]

Acqusitions

Acquisitions

Steve Madden Canada

On February 21, 2012, the Company purchased all of the assets of Steve Madden Canada Inc., Steve Madden Retail Canada Inc., Pasa Agency Inc. and Gelati Imports Inc. (collectively, “SM Canada”), the Company’s sole distributor in Canada since 1994, comprising SM Canada’s footwear, handbags and accessories wholesale and retail businesses. The transaction was completed for consideration of approximately $29,367 plus potential earn-out payments of up to a maximum of $38,000 (Canadian dollars, which converts to approximately the same in U.S. dollars), in the aggregate, based on achievement of certain earnings targets for each of the twelve-month periods ending on March 31, 2013 through 2017, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of SM Canada during the earn-out period. As of September 30, 2012, the Company estimates the fair value of the contingent consideration to be $19,975.

The transaction was accounted for using the acquisition method required by GAAP. Accordingly, the assets and liabilities of SM Canada were adjusted to their fair values, and the excess of the purchase price over the fair value of the assets acquired, including identified intangible assets, was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, which are subject to change. The purchase price has been preliminarily allocated as follows: 

Accounts receivable	$	2,496
Inventory	2,220
Prepaid expenses and other assets	147
Fixed assets	1,005
Re-acquired right	35,200
Customer relationships	4,400
Non-compete agreement	455
Accounts payable	(2,645		)
Accrued expenses	(802		)
Total fair value excluding goodwill	42,476
Goodwill	4,185
Net assets acquired	$	46,661

Prior to the acquisition, the Company and SM Canada had a preexisting relationship under which SM Canada had the right to use the Steve Madden brand throughout Canada in connection with the sale and distribution of merchandise. The settlement of the preexisting relationship is considered a re-acquired right and was valued based on the present value of estimated future cash flows.

The purchase price and related allocation are preliminary and may be revised as a result of adjustments made to the purchase price as may be required as additional information regarding assets and liabilities is revealed. Contingent consideration classified as a liability will be remeasured at fair value at each reporting date, until the contingency is resolved, with changes recognized in earnings. The goodwill related to this transaction is expected to be deductible for tax purposes over 15 years.

The Company incurred approximately $951 in acquisition related costs applicable to the SM Canada transaction, $800 of which were incurred in 2012. These expenses are included in operating expenses in the Company’s Condensed Consolidated Statements of Income.

In connection with the acquisition, the Company provided an interest free loan to the seller of SM Canada in the principal amount of $3,107 (Canadian dollars, $3,085 in US dollars). The note will be paid in five annual installments which are due on the dates the five annual earn-out payments are paid. The note was recorded net of the imputed interest, which will be amortized to income over the term of the note.

Note Q – Acquisitions (continued)

Cejon

On May 25, 2011, the Company acquired all of the outstanding shares of capital stock of closely held Cejon, Inc. and Cejon Accessories, Inc. from the sole stockholder of these companies, as well as all of the outstanding membership interests in New East Designs, LLC (together with Cejon Inc. and Cejon Accessories, “Cejon”) from its members (together with the sole stockholder of Cejon, the “Cejon Sellers”). Founded in 1991, Cejon designs, markets and sells cold weather accessories, fashion scarves, wraps and other trend accessories primarily under the Cejon brand name, private labels and under the Steve Madden brand name. Cejon had been a licensee of the Company for cold weather and selected other fashion accessories since September 2006. Management expects the Cejon acquisition will further strengthen and expand the Company’s accessories platform. The acquisition was completed for consideration of approximately $29,502 cash plus potential contingent payments pursuant to an earn-out agreement with the Cejon Sellers. The earn-out agreement specifies two tiers of potential payments to the Cejon Sellers based on the financial performance of Cejon for each of the twelve-month periods ending on June 30, 2012 through 2016, inclusive. The tier one earn-out is based on a graduated percentage of EBITDA up to a maximum EBITDA of $11,000 in each of the earn-out periods, provided that the total aggregate payments under this tier do not exceed $25,000. The tier two earn-out is based on a multiple of the amount that EBITDA exceeds certain levels in each of the earn-out periods, provided that the total aggregate payments under this tier do not exceed $33,000. The earn-out payment for the period ended June 30, 2012 was paid in the third quarter of this year.

The transaction was accounted for using the acquisition method required by GAAP. Accordingly, the assets and liabilities of Cejon were adjusted to their fair values, and the excess of the purchase price over the fair value of the assets acquired, including identified intangible assets, was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The purchase price has been allocated as follows:

Accounts receivable	$	3,631
Inventory	3,998
Prepaid expenses and other current assets	196
Fixed assets	190
Trade name	27,065
Customer relationships	3,225
Non-compete agreement	305
Other assets	24
Accounts payable	(1,318		)
Accrued expenses	(2,242		)
Total fair value excluding goodwill	35,074
Goodwill	17,759
Net assets acquired	$	52,833

Contingent consideration classified as a liability will be remeasured at fair value at each reporting date, until the contingency is resolved, with changes recognized in earnings. The goodwill related to this transaction is expected to be deductible for tax purposes over 15 years.

The Company incurred approximately $531 in acquisition related costs applicable to the Cejon transaction during the year ended December 31, 2011. These expenses were included in operating expenses in the Company’s Consolidated Statements of Income for the year ended December 31, 2011.

Note Q – Acquisitions (continued)

Topline

On May 20, 2011, the Company acquired all of the outstanding shares of capital stock of the closely held company, Topline from its sole stockholder (the “Topline Seller”). Founded in 1980, Topline and its subsidiaries design, manufacture, market and sell private label and branded women’s footwear primarily to department stores, specialty retailers and mass merchants. Topline has sourcing capabilities, sample making facilities and product development capabilities in China, including personnel and facilities engaged in direct sourcing. Management believes that Topline is an excellent strategic fit for the Company. The acquisition was completed for consideration of approximately $56,128 cash, plus potential contingent payments pursuant to an earn-out agreement with the Topline Seller. The earn-out agreement provides for potential payments to the Topline Seller based on the financial performance of Topline for the twelve-month period ended on June 30, 2012. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Topline during the earn-out period (see Note H).

The transaction was accounted for using the acquisition method required by GAAP. Accordingly, the assets and liabilities of Topline were adjusted to their fair values, and the excess of the purchase price over the fair value of the assets acquired, including identified intangible assets, was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The purchase price, net of an estimated working capital adjustment due to the Company, has been allocated as follows:

Accounts receivable	$	55,950
Inventory	8,460
Prepaid expenses and other current assets	990
Fixed assets	3,895
Trade name	16,600
Customer relationships	7,900
Non-compete agreement	300
Other assets	108
Accounts payable	(40,475		)
Accrued expenses	(7,784		)
Income tax payable	(3,082		)
Deferred tax liability	(8,491		)
Total fair value excluding goodwill	34,371
Goodwill	31,003
Net assets acquired	$	65,374

Contingent consideration classified as a liability will be remeasured at fair value at each reporting date, until the contingency is resolved, with changes recognized in earnings. The trade name, customer relationships, non-compete agreement and goodwill related to this transaction are not deductible for tax purposes. 

The Company incurred approximately $529 in acquisition related costs applicable to the Topline transaction during the year ended December 31, 2011. These expenses were included in operating expenses in the Company’s Condensed Consolidated Statements of Income.

The results of operations of SM Canada, Cejon and Topline have been included in the Company’s Condensed Consolidated Statements of Income from the date of the acquisition. Unaudited pro forma information related to these acquisitions is not included, as the impact of these transactions is not material to the Company’s consolidated results.

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Note Receivable - Related Party (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	2 Months Ended	11 Months Ended	13 Months Ended	21 Months Ended	34 Months Ended	39 Months Ended	54 Months Ended
	Jul. 12, 2010	May 31, 2011	Jun. 30, 2012	Mar. 31, 2009	May 03, 2010	Jun. 30, 2012	Dec. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Jun. 25, 2007
Notes Receivable, Related Parties, Noncurrent							$ 4,090	$ 3,561	$ 4,028	$ 3,000
Related Party Transaction, Rate				8.00%		6.00%
Interest Income Related Party							1,090
Related Party Shares Pledged As Collateral	765,000	210,000	315,000		510,000
Shares Released Related Party Transaction	555,000
Market Value Shares Pledged As Collateral Related Party	$ 6,798							$ 13,772
Stock Split A (Member)
Stock Split Conversion Ratio					three-for-two
Stock Split B (Member)
Stock Split Conversion Ratio		three-for-two

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Commitments, Contingencies and Other

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Other

Commitments, Contingencies and Other

Legal proceedings:

(a) On July 19, 2011, an individual purporting to act on behalf of a class of similarly situated individuals commenced a civil action in the United States District Court for the Central District of California, Samantha Ellison, individually and on behalf of a class of similarly situated individuals v. Steven Madden, Ltd., No. CV11-05935 (the “Ellison Action”). The Ellison Action asserts that the Company made unsolicited commercial text calls to wireless telephone numbers of the class members in violation of the Telecommunications Privacy Act and seeks, on behalf of the class, an injunction requiring the Company to cease all wireless spam activities and an award of statutory damages to the class members together with costs and reasonable attorneys' fees. The Company responded by challenging the suit on several grounds. Settlement discussions have resulted in a settlement being reached on July 30, 2012 for an aggregate gross fund amount of $10,000, including all settlement costs and administration fees, as well as the fees recoverable by class counsel. As the settlement calls for the reversion of all monies not paid to class claimants, it is possible that the actual settlement amount paid will be substantially less than $10,000. In addition, the Company's insurance coverage will cover a portion of the settlement at the rate of 45% of the initial settlement payment of $5,000 and 30% of amounts over and above the initial settlement payment. On September 25, 2012 the court certified the class for settlement purposes only and approved the settlement on a preliminary basis. The court further ordered all litigants to make further submissions to the court concerning, among other things, the merits and value of the case and to deliver notice of the proposed settlement to all class members prior to a fairness hearing and final approval of the settlement. Based on the settlement as contemplated and applying the insurance coverage as applicable, the maximum exposure to the Company is approximately $6,250; however, in light of historical "take rates" in cases of this type, the Company's counsel estimates that the actual liability to the Company will be between approximately $2,000 and $2,500. Accordingly, the Company recorded a liability in the amount of $2,500 in the second quarter of 2012. This liability is subject to change to reflect any change in the status of this matter.

(b) On February 2, 2012, two individuals purporting to be stockholders of the Company commenced separate civil actions in the Supreme Court of New York, Queens County, Mark Ioffe, Derivatively on Behalf of Nominal Defendant Steven Madden, Ltd. v. Steven Madden, et. al, No. 700188-2012 (the “Ioffe Action”) and Catherine L. Phillips, Derivatively on Behalf of Nominal Defendant Steven Madden, Ltd. v. Steven Madden, et. al, No. 700189-2012 (together with the Ioffe Action, the “Actions”). The Actions assert derivative claims challenging the decision of the Company’s Board of Directors in January 2012 to amend Steven Madden’s employment agreement dated July 15, 2005, and amended as of December 14, 2009 (the “Madden Employment Agreement”) and to amend the promissory note (the “Promissory Note”) setting forth Mr. Madden’s obligations in respect of a loan made by the Company to Mr. Madden in 2007 and amended in 2009. The Actions assert that the Board violated its duties of loyalty and good faith by approving the amendments to the Madden Employment Agreement and the Promissory Note and that the changes set forth in the amendments constitute a waste of corporate assets. The Actions also assert claims of unjust enrichment against Mr. Madden. The Actions seek, on behalf of the Company, disgorgement of any compensation that Mr. Madden has received as a result of the amended Madden Employment Agreement, an award of damages to the Company, and a declaration that the amendments of the Madden Employment Agreement and the Promissory Note are void. The Company and the other defendants filed a motion for dismissal of the Actions based on, among other things, the plaintiffs’ failure to make a demand that the Company’s Board of Directors investigate their claims. On September 13, 2012 the court granted the defendants' motion to dismiss the Actions. As of the date hereof, the plaintiffs have not filed a notice of appeal with respect to the dismissal of the actions.

(c) On August 10, 2005, following the conclusion of an audit of the Company conducted by auditors for U.S. Customs and Border Protection (“U.S. Customs”) during 2004 and 2005, U.S. Customs issued a report that asserts that certain commissions that the Company treated as “buying agents’ commissions” (which are non-dutiable) should be treated as “selling agents’ commissions” and hence are dutiable. Subsequently, U.S. Immigration and Customs Enforcement notified the Company’s legal counsel that a formal investigation of the Company’s importing practices had been commenced as a result of the audit. In September of 2007, U.S. Customs notified the Company that it had finalized its assessment of the underpaid duties at $1,400. The Company, with the advice of legal counsel, evaluated the liability in the case, including additional duties, interest and penalties, and believed that it was not likely to exceed $3,045, and accordingly, a liability for this amount was recorded as of December 31, 2009. The Company contested the conclusions of the U.S. Customs audit and filed a request for review and issuance of rulings thereon by U.S. Customs

Note S – Commitments, Contingencies and Other (continued)

Headquarters, of Regulations and Rulings, under internal advice procedures. On September 20, 2010, the Company was advised by legal counsel that U.S. Customs had issued a ruling in the matter, concluding that the commissions paid by the Company pursuant to buying agreements entered into by the Company and one of its two buying agents under review were bona fide buying-agent commissions and, therefore, were non-dutiable. With respect to the second

buying agent, U.S. Customs also ruled that beginning in February of 2002, commissions paid by the Company were bona fide buying agent commissions and, therefore, were non-dutiable. However, U.S. Customs found that the Company’s pre-2002 buying agreements with the second agent were legally insufficient to substantiate a buyer-buyer’s agent relationship between the Company and the agent and that commissions paid to the second agent under such buying agreements, in fact, were dutiable. On the basis of the U.S. Customs ruling, the Company reevaluated the liability in the case and believes that it is not likely to exceed $1,248 and the liability was reduced from $3,045 to such amount as of September 30, 2010.

On November 21, 2011, U.S. Customs issued a pre-penalty notice to the Company in which it alleges that gross negligence by the Company resulted in an underpayment of duties with respect to certain pre-2002 buying agreements and claims that the Company owes $342 as an additional duty and $1,367 in monetary penalties. In its February 16, 2012 response to the pre-penalty notice, the Company submitted that it owes no additional duty and, further, did not through negligence or gross negligence fail to pay any duty or engage in conduct amounting to either gross negligence or negligence. The Company requested that U.S. Customs withdraw its proposal to issue a notice of penalty and take no further adverse action against the Company. In the event that U.S. Customs is not inclined to withdraw the pre-penalty notice after review of the Company’s response, the Company has requested the opportunity to make an oral presentation to U.S. Customs prior to the issuance of a notice of penalty. In the event that U.S. Customs decides to issue a notice of penalty, the Company intends to file a petition for relief requesting a reduction of the level of culpability and mitigation of the penalty amount assessed. The maximum total amount of damages related to this matter is approximately $1,700 for which the Company has accrued $1,248.

(d) The Company has been named as a defendant in certain other lawsuits in the normal course of business. In the opinion of management, after consulting with legal counsel, the liabilities, if any, resulting from these matters should not have a material effect on the Company’s financial position or results of operations. It is the policy of management to disclose the amount or range of reasonably possible losses in excess of recorded amounts in its annual report.

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Basis of Reporting

9 Months Ended

Sep. 30, 2012

Basis of Reporting [Abstract]

Basis of Reporting

Basis of Reporting

The accompanying unaudited condensed consolidated financial statements of Steven Madden, Ltd. and subsidiaries (the “Company”) have been prepared in accordance with the generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of its operations for the three- and nine-month periods ended September 30, 2012 are not necessarily indicative of the operating results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and related disclosures for the year ended December 31, 2011 included in the Annual Report of Steven Madden, Ltd. on Form 10-K filed with the SEC on February 29, 2012.

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Allowances for Accounts Receivable (in dollars)	$ 6,149	$ 5,894	$ 7,114
Allowances for Due from Factors (in dollars)	$ 14,319	$ 12,325	$ 12,496
Preferred stock-issued	0	0	0
Common stock par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	60,000	60,000	60,000
Common stock, shares issued	54,307	51,408	51,571
Common stock, shares outstanding	45,904	43,005	42,868
Treasury stock-shares at cost	8,403	8,403	8,403
Preferred Class A [Member]
Preferred stock-par value	$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock- shares authorized	5,000	5,000	5,000
Preferred Class B [Member]
Preferred stock-par value	$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock- shares authorized	60	60	60

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Sales Deductions

9 Months Ended

Sep. 30, 2012

Sales Deductions [Abstract]

Sales Deductions

Sales Deductions

The Company supports retailers’ initiatives to maximize sales of the Company’s products on the retail floor by subsidizing the co-op advertising programs of such retailers, providing them with inventory markdown allowances and participating in various other marketing initiatives of its major customers. In addition, the Company accepts returns for damaged products for which the Company’s costs are normally charged back to the responsible third-party factory. Such expenses are reflected in the financial statements as deductions to net sales.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 05, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	STEVEN MADDEN, LTD.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		45,909,160
Amendment Flag	false
Entity Central Index Key	0000913241
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Cost of Sales

9 Months Ended

Sep. 30, 2012

Cost of Sales [Abstract]

Cost of Sales

Cost of Sales

All costs incurred to bring finished products to the Company’s distribution center or to the customers’ freight forwarder and, in the Retail segment, the costs to bring products to the Company’s stores, are included in the cost of sales line on the Condensed Consolidated Statements of Income. These include the cost of finished products, purchase commissions, letter of credit fees, brokerage fees, sample expenses, custom duty, inbound freight, royalty payments on licensed products, labels and product packaging. All warehouse and distribution costs related to the Wholesale segments and freight to customers, if any, are included in the operating expenses line item of the Company’s Condensed Consolidated Statements of Income. The Company’s gross margins may not be comparable to those of other companies in the industry because some companies may include warehouse and distribution costs, as well as other costs excluded from cost of sales by the Company, as a component of cost of sales, while other companies report on the same basis as the Company and include them in operating expenses.

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Net sales	$ 356,883	$ 911,545	$ 688,794	$ 313,887
Cost of sales	225,668	579,983	426,114	204,434
Gross profit	131,215	331,562	262,680	109,453
Commission and licensing fee income – net	3,875	12,600	14,648	5,649
Operating expenses	(73,573)	(205,482)	(162,177)	(64,594)
Impairment charges and provision for litigation	5,144	9,454	0	0
Income from operations	56,373	129,226	115,151	50,508
Interest and other income - net	2,138	4,271	4,905	1,732
Income before provision for income taxes	58,511	133,497	120,056	52,240
Provision for income taxes	20,698	46,869	46,641	20,372
Net income	37,813	86,628	73,415	31,868
Net income (loss) attributable to noncontrolling interests	(83)	(35)	(132)	(43)
Net income attributable to Steven Madden, Ltd.	$ 37,896	$ 86,663	$ 73,547	$ 31,911
Basic net income per share (in dollars per share)	$ 0.88	$ 2.02	$ 1.74	$ 0.75
Diluted net income per share (in dollars per share)	$ 0.86	$ 1.97	$ 1.70	$ 0.74
Basic weighted average common shares outstanding (in shares)	43,131	42,936	42,180	42,430
Effect of dilutive securities – options/restricted stock (in shares)	1,106	1,085	973	977
Diluted weighted average common shares outstanding (in shares)	44,237	44,021	43,153	43,407

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Marketable Securities

9 Months Ended

Sep. 30, 2012

Marketable Securities [Abstract]

Marketable Securities

Marketable Securities

Marketable securities consist primarily of corporate bonds with maturities greater than three months and up to ten years at the time of purchase as well as marketable equity securities. These securities, which are classified as available-for-sale, are carried at fair value, with unrealized gains and losses, net of any tax effect, reported in stockholders’ equity as accumulated other comprehensive income (loss). These securities are classified as current and non-current marketable securities based upon their maturities. Amortization of premiums and discounts is included in interest income. For the three- and nine-month periods ended September 30, 2012, the amortization of bond premiums totals $182 and $710, respectively, compared to $234 and $898, respectively, for the comparable periods in 2011. The values of these securities may fluctuate as a result of changes in equity values, market interest rates and credit risk.

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Note Receivable - Related Party

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Note Receivable - Related Party

Note Receivable – Related Party

On June 25, 2007, the Company made a loan to Steve Madden, its Creative and Design Chief and a principal stockholder of the Company, in the amount of $3,000 in order for Mr. Madden to satisfy a personal tax obligation resulting from the exercise of options that were due to expire and retain the underlying Company common stock, which he pledged to the Company as collateral to secure the loan. Mr. Madden executed a secured promissory note in favor of the Company bearing interest at an annual rate of 8%, which was due on the earlier of the date Mr. Madden ceases to be employed by the Company or December 31, 2007. The note was amended and restated as of December 19, 2007 to extend the maturity date to March 31, 2009, and amended and restated

Note F – Note Receivable – Related Party (continued)

again as of April 1, 2009 to change the interest rate to 6% and extend the maturity date to June 30, 2015 at which time all principal and accrued interest would become due. On January 3, 2012, in connection with an amendment of Mr. Madden’s employment contract, the note was again amended and restated (the “Third Amended and Restated Note”) to extend the maturity date to December 31, 2023 and eliminate accrual of interest after December 31, 2011. In addition, the Third Amended and Restated Note provides that, commencing on December 31, 2014 and annually on each December 31 thereafter through the maturity date, one-tenth of the principal amount thereof, together with accrued interest, will be cancelled by the Company provided that Mr. Madden

continues to be employed by the Company on each such December 31. As of December 31, 2011, $1,090 of interest has accrued on the principal amount of the loan related to the period prior to the elimination of the accrual of interest and has been reflected on the Company’s Condensed Consolidated Financial Statements. Due to the three-for-two stock split effected on May 3, 2010, the number of shares securing the loan increased from 510,000 shares to 765,000 shares. Based upon the increase in the market value of the Company’s common stock since the inception of the loan, on July 12, 2010, the Company released from its security interest 555,000 shares of the Company’s common stock, retaining 210,000 shares with a total market value on that date of $6,798, as collateral for the loan. Subsequently, pursuant to the three-for-two stock split effected on May 31, 2011, the number of shares securing the repayment of the loan has increased from 210,000 shares to 315,000 shares. On September 30, 2012, the total market value of these shares was $13,772. Pursuant to the elimination of further interest accumulation under the Third Amended and Restated Note, the outstanding principal and the accrued interest as of December 31, 2011 has been discounted to reflect imputed interest, which will be amortized over the remaining life of the loan.

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

The following is a summary of the carrying amount of goodwill by segment as of September 30, 2012:

	Wholesale					Net Carrying
	Footwear		Accessories		Retail	Amount
Balance at January 1, 2012	$	20,939	$	49,155	5,501	$	75,595
Purchase accounting adjustment	11,610		169		—	11,779
Acquisition of SM Canada	2,971		—		1,214	4,185
Balance at September 30, 2012	$	35,520	$	49,324	6,715	$	91,559

Pursuant to the final reconciliation of assets and liabilities acquired in the Topline and Cejon acquisitions, adjustments to goodwill were recorded in the amount of $11,610 and $169, respectively.

The following table details identifiable intangible assets as of September 30, 2012:

	Estimated Lives	Cost Basis		Accumulated Amortization		Net Carrying Amount
Trade names	6–10 years	$	4,590	$	1,509	$	3,081
Customer relationships	10 years	27,234		6,897		20,337
License agreements	3–6 years	5,600		5,600		—
Non-compete agreement	5 years	2,440		1,446		994
Other	3 years	14		14		—
		39,878		15,466		24,412
Re-acquired right	indefinite	35,200		—		35,200
Tradenames	indefinite	76,888		—		76,888
		$	151,966	$	15,466	$	136,500

The estimated future amortization expense of purchased intangibles as of September 30, 2012 is as follows:

2012 (remaining three months)	$	838
2013	3,351
2014	3,286
2015	3,101
2016	2,795
Thereafter	11,041
	$	24,412

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the second quarter of 2012, the Company determined to invest indefinitely a portion of its 2012 earnings from its foreign operations in the acquisition and expansion of SM Canada. As a result of this investment, the Company's effective income tax rate decreased to 35.4% and 35.1% for the three and nine months ended September 30, 2012, respectively.

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Revenue Recognition

9 Months Ended

Sep. 30, 2012

Revenue Recognition [Abstract]

Revenue Recognition

Revenue Recognition

The Company recognizes revenue on wholesale sales when products are shipped pursuant to its standard terms, which are freight on board (“FOB”) Company warehouse, or when products are delivered to the consolidators, or any other destination, as per the terms of the customers’ purchase order, persuasive evidence of an arrangement exists, the price is fixed or determinable and collection is reasonably assured. Sales reductions on wholesale sales for anticipated discounts, allowances and other deductions are recognized during the period when sales are recorded. Customers retain the right to replacement of the product for poor quality or improper or short shipments, which have historically been immaterial. Retail sales are recognized when the payment is received from customers and are recorded net of estimated returns. The Company also generates commission income acting as a buying agent by arranging to manufacture private label shoes to the specifications of its clients. The Company’s commission revenue includes fees charged for its design, product and development services provided to certain suppliers in connection with the Company’s private label business. Commission revenue and product and development fees are recognized as earned when title to the product transfers from the manufacturer to the customer and collections are reasonably assured and are reported on a net basis after deducting related operating expenses.

The Company licenses its Steve Madden® and Steven by Steve Madden® trademarks for use in connection with the manufacture, marketing and sale of sunglasses, eyewear, outerwear, bedding, hosiery and sleepwear. In addition, the Company licenses the Betsey Johnson® trademarks for use in connection with the manufacture, marketing and sale of sleepwear, jewelry, swimwear, eyewear, watches, fragrances, outerwear and luggage. The license agreements require the licensee to pay the Company a royalty and, in substantially all of the agreements, an advertising fee based on the higher of a minimum or a net sales percentage as defined in the various agreements. In addition, under the terms of retail selling agreements, most of the Company’s international distributors are required to pay the Company a royalty based on a percentage of net sales, in addition to a commission and a design fee on the purchases of the Company’s products. Licensing revenue is recognized on the basis of net sales reported by the licensees, or the minimum guaranteed royalties, if higher. In substantially all of the Company’s license agreements, the minimum guaranteed royalty is earned and payable on a quarterly basis.

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Fair Value Measurement

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

The accounting guidance under “Fair Value Measurements and Disclosures” (“ASC 820-10”) requires the Company to make disclosures about the fair value of certain of its assets and liabilities. ASC 820-10 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. ASC 820-10 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. A brief description of those three levels is as follows:

• Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

• Level 3: Significant unobservable inputs.

The Company’s financial assets and liabilities subject to fair value measurements as of September 30, 2012 and December 31, 2011 are as follows: 

Note H – Fair Value Measurement (continued)

			September 30, 2012
			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	5,492	$	5,492	$	—	$	—
Current marketable securities – available for sale	9,964		9,964		—		—
Investment in Bakers	—		—		—		—
Note receivable – related party	3,561		—		—		3,561
Note receivable – Bakers	—		—		—		—
Note receivable – Betsey Johnson	500		—		—		500
Note receivable – Seller of SM Canada	3,085		—		—		3,085
Long-term marketable securities – available for sale	79,464		79,464		—		—
Total assets	$	102,066	$	94,920	$	—	$	7,146
Liabilities:
Contingent consideration	$	57,751	—		—		$	57,751
Total liabilities	$	57,751	—		—		$	57,751

			December 31, 2011
			Fair Value Measurements Using Fair Value Hierarchy
	Fair value		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	57,652	$	57,652	$	—	$	—
Current marketable securities – available for sale	5,659		5,659		—		—
Investment in Bakers	996		—		996		—
Note receivable – related party	4,090		—		—		4,090
Note receivable – Bakers	4,092		—		—		4,092
Note receivable – Betsey Johnson	3,309		—		—		3,309
Long-term marketable securities – available for sale	72,004		72,004		—		—
Total assets	$	147,802	$	135,315	$	996	$	11,491
Liabilities:
Contingent consideration	$	37,921	—		—		$	37,921
Total liabilities	$	37,921	—		—		$	37,921

Note H – Fair Value Measurement (continued)

Pursuant to the Debenture and Stock Purchase Agreement with Bakers (see Note E), the Company acquired 1,844,860 unregistered shares of Bakers common stock, which trades on the OTC Bulletin Board. These shares, which are thinly traded, were valued using the quoted price of similar registered shares of Bakers common stock adjusted for the effect of the transfer restriction, considering factors such as the nature and duration of the transfer restriction, the volatility of the stock and the risk free interest rate. The shares are included in deposits and other assets on the Company’s Condensed Consolidated Balance Sheets. For the note receivable due from Bakers (see Note E), which was purchased at a substantial discount, the carrying value was determined to be the fair value. On October 3, 2012, Bakers filed for Chapter 11 protection in the United States Bankruptcy Court. As a consequence of the bankruptcy, Bakers common stock and the debenture, as well as account receivable due from Bakers, which had been valued at $996, $4,148 and $852, respectively, are considered impaired, and therefore were deemed to have no value. Accordingly, charges of $996 and $4,148 were included in the impairment charges and provision for litigation and a charge of $852 was included in commission and licensing fee income in the Condensed Consolidated Statements of Income for the third quarter of this year.

For the note receivable due from related party and due from the sellers of SM Canada (see Note Q), the carrying value was determined to be the fair value, based upon their imputed or actual interest rates, which approximate current market interest rates. In April 2012, Betsey Johnson LLC announced that it would commence an orderly liquidation under the protection of the United States Bankruptcy Court. The note receivable due from Betsey Johnson was valued using the estimated future recoveries from the bankruptcy proceeding.

The Company has recorded a liability for potential contingent consideration in connection with the February 21, 2012 acquisition of SM Canada (see Note Q). Pursuant to the terms of an earn-out agreement between the Company and the seller of SM Canada, earn-out payments will be due annually to the seller of SM Canada based on the financial performance of SM Canada for each of the twelve-month periods ending on March 31, 2013 through 2017, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of SM Canada during the earn-out period.

The Company has recorded a liability for potential contingent consideration in connection with the May 25, 2011 acquisition of Cejon Inc., Cejon Accessories, Inc. and New East Designs, LLC (collectively "Cejon") (see Note Q). Pursuant to the terms of an earn-out agreement between the Company and the sellers of Cejon, earn-out payments will be made annually to the sellers of Cejon, based on the financial performance of Cejon for each of the twelve-month periods ending on June 30, 2012 through 2016, inclusive. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Cejon during the earn-out period. The earn-out payment for the period ended June 30, 2012 was paid in the third quarter of this year.

The Company has recorded a liability for potential contingent consideration in connection with the May 20, 2011 acquisition of The Topline Corporation ("Topline") (see Note Q). Pursuant to the terms of the acquisition agreement, an earn-out payment will be made to the seller of Topline based on the financial performance of Topline for the twelve-month period ended June 30, 2012. The fair value of the contingent payment was estimated using the present value of management’s projections of the financial results of Topline during the earn-out period.

The Company has recorded a liability for contingent consideration as a result of the February 10, 2010 acquisition of Big Buddha, Inc. The contingent consideration will be payable to the seller of Big Buddha based on the financial performance of Big Buddha for the twelve-month period ending on March 31, 2013. The fair value of the contingent payments was estimated using the present value of management’s projections of the financial results of Big Buddha during the earn-out period.

Accounting guidance permits entities to choose to measure financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The accounting guidance also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that chose different measurement attributes for similar assets and liabilities. The Company has elected not to measure any eligible items at fair value.

The carrying value of certain financial instruments such as accounts receivable, due from factor and accounts payable approximates their fair values due to the short-term nature of their underlying terms. The fair values of investment in marketable securities available for sale are determined by reference to market data and other valuation techniques, as appropriate. Fair value of the notes receivable held by the Company approximates their carrying value based upon their imputed or actual interest rate, which approximates current market interest rates.

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Inventories

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

Inventory Disclosure

nventories, which consist of finished goods on hand and in transit, are stated at the lower of cost (first-in, first-out method) or market.

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Taxes Collected From Customers

9 Months Ended

Sep. 30, 2012

Taxes Collected From Customers [Abstract]

Taxes Collected From Customers

Taxes Collected From Customers

The Company accounts for certain taxes collected from its customers in accordance with the accounting guidance which permits companies to adopt a policy of presenting taxes in the income statement on either a gross basis (included in revenues and costs) or a net basis (excluded from revenues). Taxes within the scope of this accounting guidance would include taxes that are imposed on a revenue transaction between a seller and a customer, for example, sales taxes, use taxes, value-added taxes and some types of excise taxes. The Company has consistently recorded all taxes on a net basis.

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Notes Receivable (Details) - (Table) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Total	$ 3,585	$ 7,401	$ 7,318
Note receivable – Bakers [Member]
Due from	0	4,092
Note receivable – Betsey Johnson [Member]
Due from	500	3,309
Note receivable – Seller of SM Canada [Member]
Due from	$ 3,085	$ 0

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Goodwill and Intangible Assets (Detail) - (Table 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Jan. 02, 2012
Wholesale Footwear [Member]
Goodwill, Purchase Accounting Adjustments	$ 11,610
Goodwill [Roll Forward]
Balance at January 1, 2012		20,939
Acquisition of SM Canada	2,971
Balance at June 30, 2012	35,520	20,939
Wholesale Accessories [Member]
Goodwill, Purchase Accounting Adjustments	169
Goodwill [Roll Forward]
Balance at January 1, 2012		49,155
Acquisition of SM Canada	0
Balance at June 30, 2012	49,324	49,155
Retail [Member]
Goodwill [Roll Forward]
Balance at January 1, 2012		5,501
Acquisition of SM Canada	1,214
Balance at June 30, 2012	6,715	5,501
Net Carrying Amount [Member]
Goodwill, Purchase Accounting Adjustments	11,779
Goodwill [Roll Forward]
Balance at January 1, 2012		75,595
Acquisition of SM Canada	4,185
Balance at June 30, 2012	$ 91,559	$ 75,595

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

In March 2006, the Board of Directors approved the Steven Madden, Ltd. 2006 Stock Incentive Plan (the “Plan”) under which nonqualified stock options, stock appreciation rights, performance shares, restricted stock, other stock-based awards and performance-based cash awards may be granted to employees, consultants and non-employee directors. The stockholders approved the Plan on May 26, 2006. On May 25, 2007, the stockholders approved an amendment to the Plan to increase the maximum number of shares that may be issued under the Plan from 2,700,000 to 3,487,500. On May 22, 2009, the stockholders approved a second amendment to the Plan that increased the maximum number of shares that may be issued under the Plan to 9,144,000. On May 25, 2012, the stockholders approved a third amendment to the Plan that increased the maximum number of shares that may be issued under the Plan to 15,644,000. The following table summarizes the number of shares of common stock authorized for use under the Plan, the number of stock-based awards granted (net of expired or cancelled awards) under the Plan and the number of shares of common stock available for the grant of stock-based awards under the Plan:

Common stock authorized	15,644,000
Stock-based awards, including restricted stock and stock options granted, net of expired or cancelled	(11,089,000	)
Common stock available for grant of stock-based awards as of September 30, 2012	4,555,000

Note P – Stock-Based Compensation (continued)

Total equity-based compensation for the three and nine months ended September 30 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Restricted stock	$	3,319	$	1,093	$	8,177	$	4,050
Stock options	1,392		1,679		4,483		4,287
Total	$	4,711	$	2,772	$	12,660	$	8,337

Equity-based compensation is included in operating expenses on the Company’s Condensed Consolidated Statements of Income.

Stock Options

Cash proceeds and intrinsic values related to total stock options exercised during the three- and nine-month periods ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Proceeds from stock options exercised	$	2,040	$	520	$	6,991	$	4,005
Intrinsic value of stock options exercised	$	4,213	$	1,062	$	12,445	$	8,861

During the three and nine months ended September 30, 2012, options to purchase approximately 65,000 shares of common stock with a weighted average exercise price of $28.82 and options to purchase approximately 745,000 shares of common stock with a weighted average exercise price of $18.53 vested, respectively. During the three and nine months ended September 30, 2011, options to purchase approximately 86,000 shares of common stock with a weighted average exercise price of $24.61 and options to purchase approximately 697,000 shares of common stock with a weighted average exercise price of $15.23 vested, respectively. As of September 30, 2012, there were unvested options relating to 1,269,000 shares of common stock with a total of $7,845of unrecognized compensation cost and an average vesting period of 2.1 years.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted, which requires several assumptions. The expected term of the options represents the estimated period of time until exercise and is based on the historical experience of similar awards. Expected volatility is based on the historical volatility of the Company’s common stock. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. With the exception of special dividends paid in November of 2005 and 2006, the Company historically has not paid regular cash dividends and thus the expected dividend rate is assumed to be zero. The following weighted average assumptions were used for stock options granted:

	2012	2011
Volatility	41.1% to 47.4%	47.3% to 48.7%
Risk free interest rate	0.47% to 0.87%	0.61% to 1.78%
Expected life in years	3.1 to 4.6	2.8 to 4.4
Dividend yield	0.00%	0.00%
Weighted average fair value	$14.05	$10.91

Note P – Stock-Based Compensation (continued)

Activity relating to stock options granted under the Company’s plans and outside the plans during the nine months ended September 30, 2012 is as follows: 

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2012	2,703,000		$	17.79
Granted	213,000		40.30
Exercised	(423,000	)	16.51
Cancelled/Forfeited	(39,000	)	17.67
Outstanding at September 30, 2012	2,454,000		$	19.96	4.2 years	$	58,312
Exercisable at September 30, 2012	1,185,000		$	16.94	3.8 years	$	31,732

Restricted Stock

The following table summarizes restricted stock activity during the nine months ended September 30, 2012 and 2011:

	2012				2011
	Number of Shares		Weighted Average Fair Value at Grant Date		Number of Shares		Weighted Average Fair Value at Grant Date
Non-vested at January 1	671,000		$	25.44	563,000		$	17.20
Granted	2,409,000		36.22		334,000		31.34
Vested	(172,000	)	25.11		(179,000	)	14.93
Forfeited	(2,000	)	38.10		—		—
Non-vested at September 30	2,906,000		$	34.39	718,000		$	24.34

As of September 30, 2012, there was $92,431 of total unrecognized compensation cost related to restricted stock awards granted under the Plan. This cost is expected to be recognized over a weighted average of 10.1 years. The Company determines the fair value of its restricted stock awards based on the market price of its common stock on the date of grant.

On January 3, 2012, the Company and its Creative and Design Chief, Steven Madden, entered into an amendment of Mr. Madden’s existing employment agreement, pursuant to which, on February 8, 2012, Mr. Madden was granted 975,371 restricted shares of the Company’s common stock at the then market price of $41.01, which will vest in equal annual installments over a seven-year period commencing on December 31, 2017 and, thereafter, on each December 31 through December 31, 2023, subject to Mr. Madden’s continued employment on each such vesting date. Pursuant to the contract, on June 30, 2012, Mr. Madden exercised his right to receive an additional restricted stock award, and on July 3, 2012 he was granted 1,262,228 restricted shares of the Company's common stock at the then market price of $31.69, which will vest in the same manner as the prior grant.

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Basis of Reporting (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basis of Accounting, Policy

Basis of Reporting

The accompanying unaudited condensed consolidated financial statements of Steven Madden, Ltd. and subsidiaries (the “Company”) have been prepared in accordance with the generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of its operations for the three- and nine-month periods ended September 30, 2012 are not necessarily indicative of the operating results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and related disclosures for the year ended December 31, 2011 included in the Annual Report of Steven Madden, Ltd. on Form 10-K filed with the SEC on February 29, 2012.

New Accounting Pronouncements, Policy

Recently Adopted Accounting Standards

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-08, “Intangibles – Goodwill and Other” (“ASU 2011-08”). Under ASU 2011-08, when testing goodwill for impairment, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If an entity believes, as a result of its qualitative assessment that the fair value of a reporting unit is less than its carrying amount, performing the current two-step impairment test is not required. The guidance also includes a number of events and circumstances that an entity should consider in conducting the qualitative assessment. The adoption of this guidance, which became effective for the Company on January 1, 2012, did not have a material impact on our financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05 “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). Under ASU No. 2011-05, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of which option is selected, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU No. 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU No. 2011-05 which became effective for the Company on January 1, 2012, only affected the presentation of financial statements and thus had no impact on the financial results or financial position. In October 2011, the FASB announced plans to defer the presentation of items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income.

Use of Estimates, Policy

Significant areas involving management estimates include allowances for bad debts, returns and customer chargebacks and contingent payment liability. The Company provides reserves on trade accounts receivables and due from factors for future customer chargebacks and markdown allowances, discounts, returns and other miscellaneous compliance related deductions that relate to the current period sales. The Company evaluates anticipated chargebacks by reviewing several performance indicators of its major customers. These performance indicators, which include retailers’ inventory levels, sell-through rates and gross margin levels, are analyzed by management to estimate the amount of the anticipated customer allowance.

Marketable Securities, Policy

Marketable Securities

Marketable securities consist primarily of corporate bonds with maturities greater than three months and up to ten years at the time of purchase as well as marketable equity securities. These securities, which are classified as available-for-sale, are carried at fair value, with unrealized gains and losses, net of any tax effect, reported in stockholders’ equity as accumulated other comprehensive income (loss). These securities are classified as current and non-current marketable securities based upon their maturities. Amortization of premiums and discounts is included in interest income. For the three- and nine-month periods ended September 30, 2012, the amortization of bond premiums totals $182 and $710, respectively, compared to $234 and $898, respectively, for the comparable periods in 2011. The values of these securities may fluctuate as a result of changes in equity values, market interest rates and credit risk.

Revenue Recognition, Policy

Revenue Recognition

The Company recognizes revenue on wholesale sales when products are shipped pursuant to its standard terms, which are freight on board (“FOB”) Company warehouse, or when products are delivered to the consolidators, or any other destination, as per the terms of the customers’ purchase order, persuasive evidence of an arrangement exists, the price is fixed or determinable and collection is reasonably assured. Sales reductions on wholesale sales for anticipated discounts, allowances and other deductions are recognized during the period when sales are recorded. Customers retain the right to replacement of the product for poor quality or improper or short shipments, which have historically been immaterial. Retail sales are recognized when the payment is received from customers and are recorded net of estimated returns. The Company also generates commission income acting as a buying agent by arranging to manufacture private label shoes to the specifications of its clients. The Company’s commission revenue includes fees charged for its design, product and development services provided to certain suppliers in connection with the Company’s private label business. Commission revenue and product and development fees are recognized as earned when title to the product transfers from the manufacturer to the customer and collections are reasonably assured and are reported on a net basis after deducting related operating expenses.

The Company licenses its Steve Madden® and Steven by Steve Madden® trademarks for use in connection with the manufacture, marketing and sale of sunglasses, eyewear, outerwear, bedding, hosiery and sleepwear. In addition, the Company licenses the Betsey Johnson® trademarks for use in connection with the manufacture, marketing and sale of sleepwear, jewelry, swimwear, eyewear, watches, fragrances, outerwear and luggage. The license agreements require the licensee to pay the Company a royalty and, in substantially all of the agreements, an advertising fee based on the higher of a minimum or a net sales percentage as defined in the various agreements. In addition, under the terms of retail selling agreements, most of the Company’s international distributors are required to pay the Company a royalty based on a percentage of net sales, in addition to a commission and a design fee on the purchases of the Company’s products. Licensing revenue is recognized on the basis of net sales reported by the licensees, or the minimum guaranteed royalties, if higher. In substantially all of the Company’s license agreements, the minimum guaranteed royalty is earned and payable on a quarterly basis.

Revenue Recognition, Excise and Sales Taxes, Policy

Taxes Collected From Customers

The Company accounts for certain taxes collected from its customers in accordance with the accounting guidance which permits companies to adopt a policy of presenting taxes in the income statement on either a gross basis (included in revenues and costs) or a net basis (excluded from revenues). Taxes within the scope of this accounting guidance would include taxes that are imposed on a revenue transaction between a seller and a customer, for example, sales taxes, use taxes, value-added taxes and some types of excise taxes. The Company has consistently recorded all taxes on a net basis.

Revenue Recognition, Sales Deductions, Policy

Sales Deductions

The Company supports retailers’ initiatives to maximize sales of the Company’s products on the retail floor by subsidizing the co-op advertising programs of such retailers, providing them with inventory markdown allowances and participating in various other marketing initiatives of its major customers. In addition, the Company accepts returns for damaged products for which the Company’s costs are normally charged back to the responsible third-party factory. Such expenses are reflected in the financial statements as deductions to net sales.

Cost of Sales, Policy

Cost of Sales

All costs incurred to bring finished products to the Company’s distribution center or to the customers’ freight forwarder and, in the Retail segment, the costs to bring products to the Company’s stores, are included in the cost of sales line on the Condensed Consolidated Statements of Income. These include the cost of finished products, purchase commissions, letter of credit fees, brokerage fees, sample expenses, custom duty, inbound freight, royalty payments on licensed products, labels and product packaging. All warehouse and distribution costs related to the Wholesale segments and freight to customers, if any, are included in the operating expenses line item of the Company’s Condensed Consolidated Statements of Income. The Company’s gross margins may not be comparable to those of other companies in the industry because some companies may include warehouse and distribution costs, as well as other costs excluded from cost of sales by the Company, as a component of cost of sales, while other companies report on the same basis as the Company and include them in operating expenses.

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Acquisitions (Detail) - (Table) (USD $) In Thousands, unless otherwise specified	Feb. 21, 2012 SM Canada [Member]	May 25, 2011 Cejon Acquisition [Member]	May 20, 2011 Topline Acquisition [Member]
Accounts receivable	$ 2,496	$ 3,631	$ 55,950
Inventory	2,220	3,998	8,460
Prepaid expenses and other assets	147	196	990
Fixed assets	1,005	190	3,895
Trade name		27,065	16,600
Re-acquired right	35,200
Customer relationships	4,400	3,225	7,900
Non-compete agreement	455	305	300
Other assets		24	108
Accounts payable	(2,645)	(1,318)	(40,475)
Accrued expenses	(802)	(2,242)	(7,784)
Income tax payable			(3,082)
Deferred tax liability			(8,491)
Total fair value excluding goodwill	42,476	35,074	34,371
Goodwill	4,185	17,759	31,003
Net assets acquired	$ 46,661	$ 52,833	$ 65,374

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Net Income Per Share of Common Stock (Detail)	3 Months Ended		9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Net Income Per Share of Common Stock [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	99,000	19,000	99,000	169,000	19,000

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		15 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Statement of Other Comprehensive Income [Abstract]
Net income	$ 37,813	$ 86,628	$ 73,415	$ 31,868
Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustment	160	67	0	0
Unrealized gain (loss) on marketable securities	506	952	(232)	(644)
Total other comprehensive income (loss) (net of tax)	666	1,019	(232)	(644)
Comprehensive income	38,479	87,647	73,183	31,224
Comprehensive income attributable to noncontrolling interests	(83)	(35)	(132)	(43)
Comprehensive income attributable to Steven Madden, Ltd.	$ 38,562	$ 87,682	$ 73,315	$ 31,267

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Due To and From Factor

9 Months Ended

Sep. 30, 2012

Due To and From Factor [Abstract]

Due To And From Factor

Due From Factor

The Company has a collection agency agreement with Rosenthal & Rosenthal, Inc. (“Rosenthal”) that became effective on September 15, 2009. The agreement can be terminated by the Company or Rosenthal at any time upon 60 days prior written notice. Under the agreement the Company can request advances from Rosenthal of up to 85% of aggregate receivables submitted to Rosenthal. The agreement provides the Company with a $30 million credit facility with a $15 million sub-limit for letters of credit at an interest rate based, at the Company’s election, upon either the prime rate or LIBOR. The Company also pays a fee based on a percentage of the gross invoice amount submitted to Rosenthal. Originally the fee was 0.275% of the gross invoice amount but, on July 10, 2012 the agreement was amended to reduce the fee to 0.25%. Rosenthal assumes the credit risk on a substantial portion of the receivables that the Company submits to it and, to the extent of any loans made to the Company, Rosenthal maintains a lien on all of the Company’s receivables to secure the Company’s obligations.

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Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Schedule of Notes Receivable

As of September 30, 2012 and December 31, 2011, Notes Receivable were comprised of the following: 

	September 30, 2012		December 31, 2011
Due from Bakers Footwear Group, Inc.	$	—	$	4,092
Due from Betsey Johnson LLC	500		3,309
Due from seller of SM Canada (see Note Q)	3,085		—
Total	$	3,585	$	7,401

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Fair Value Measurement (Detail) - (Table) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value [Member]
Assets:
Cash Equivalents	$ 5,492	$ 57,652
Current marketable securities – available for sale	9,964	5,659
Investment in Bakers	0	996
Long-term marketable securities – available for sale	79,464	72,004
Total assets	102,066	147,802
Liabilities:
Contingent consideration	57,751	37,921
Total liabilities	57,751	37,921
Fair Value [Member] | Note receivable – related party [Member]
Assets:
Notes Receivable, Fair Value Disclosure	3,561	4,090
Fair Value [Member] | Note receivable – Bakers [Member]
Assets:
Investment in Bakers	996
Notes Receivable, Fair Value Disclosure	0	4,092
Fair Value [Member] | Note receivable – Betsey Johnson [Member]
Assets:
Notes Receivable, Fair Value Disclosure	500	3,309
Fair Value [Member] | Note receivable – Seller of SM Canada [Member]
Assets:
Notes Receivable, Fair Value Disclosure	3,085
Fair Value, Inputs, Level 1 [Member]
Assets:
Cash Equivalents	5,492	57,652
Current marketable securities – available for sale	9,964	5,659
Investment in Bakers	0	0
Long-term marketable securities – available for sale	79,464	72,004
Total assets	94,920	135,315
Liabilities:
Contingent consideration	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 1 [Member] | Note receivable – related party [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 1 [Member] | Note receivable – Bakers [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 1 [Member] | Note receivable – Betsey Johnson [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 1 [Member] | Note receivable – Seller of SM Canada [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0
Fair Value, Inputs, Level 2 [Member]
Assets:
Cash Equivalents	0	0
Current marketable securities – available for sale	0	0
Investment in Bakers	0	996
Long-term marketable securities – available for sale	0	0
Total assets	0	996
Liabilities:
Contingent consideration	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 2 [Member] | Note receivable – related party [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member] | Note receivable – Bakers [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member] | Note receivable – Betsey Johnson [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member] | Note receivable – Seller of SM Canada [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0
Fair Value, Inputs, Level 3 [Member]
Assets:
Cash Equivalents	0	0
Current marketable securities – available for sale	0	0
Investment in Bakers	0	0
Long-term marketable securities – available for sale	0	0
Total assets	7,146	11,491
Liabilities:
Contingent consideration	57,751	37,921
Total liabilities	57,751	37,921
Fair Value, Inputs, Level 3 [Member] | Note receivable – related party [Member]
Assets:
Notes Receivable, Fair Value Disclosure	3,561	4,090
Fair Value, Inputs, Level 3 [Member] | Note receivable – Bakers [Member]
Assets:
Notes Receivable, Fair Value Disclosure	0	4,092
Fair Value, Inputs, Level 3 [Member] | Note receivable – Betsey Johnson [Member]
Assets:
Notes Receivable, Fair Value Disclosure	500	3,309
Fair Value, Inputs, Level 3 [Member] | Note receivable – Seller of SM Canada [Member]
Assets:
Notes Receivable, Fair Value Disclosure	$ 3,085

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Net Income Per Share of Common Stock

9 Months Ended

Sep. 30, 2012

Net Income Per Share of Common Stock [Abstract]

Net Income Per Share of Common Stock

Net Income Per Share of Common Stock

Basic net income per share is based on the weighted average number of shares of common stock outstanding during the period, which does not include unvested restricted stock subject to forfeiture. Diluted net income per share reflects: a) the potential dilution assuming shares of common stock were issued upon the exercise of outstanding in-the-money options and the proceeds thereof were used to purchase shares of the Company’s common stock at the average market price during the period, and b) the vesting of granted nonvested restricted stock awards for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost not yet recognized attributable to future services using the treasury stock method, to the extent dilutive. For both the three- and nine-month periods ended September 30, 2012, options to purchase approximately 99,000 shares of common stock have been excluded in the calculation of diluted income per share as compared with 19,000 and 169,000 shares that were excluded for the three- and nine-month periods ended September 30, 2011, respectively, as the result would have been antidilutive. For the three- and nine-month periods ended September 30, 2012 and 2011, all unvested restricted stock awards were dilutive.