Steve Madden has taken over a $48.8 million (about £31.6 million) loan to Betsey Johnson LLC that is currently in default. SEC documents filed Thursday show that if this loan is not paid by 20 August 2012, Madden will end up owning the brand and possibly the collateral that secured the loan in the first place – namely the designer and her business partner Chantal Bacon's personal assets, as well as the company's intellectual property, aka its brand name.
Madden spent about $27.6 million (about £17.8 million) to buy out this loan through a wholly owned subsidiary formed on Thursday specifically for this transaction.
The shoe and handbag maker is no stranger to the sixtyeight-year-old Johnson's products and the brand. Madden holds the license for handbags, small leather goods, belts and umbrellas under the Betsey Johnson and Betseyville brands.
This financial snafu comes at a time when it could put a damper on her spring 2011 catwalk show, set for Monday, 13 September at the Tents at Lincoln Centre. However, as of press time, there was no word about a change, so it seems the show will go on.
Meanwhile Madden's company seems to be on fire. The maker of Madonna's Material Girl line and Olsenboye shoes recently bought handbag maker Big Buddah for about $11 million (about £7.1 million) in cash. Last month, it made a $5 million (about £3.2 million) investment in Bakers Footwear Group. The acquisition of Betsey Johnson could end up being a well-priced feather in Madden's cap.
Calls for comment to Madden and Johnson were not returned.
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