NEW YORK CITY-Avid shoe-shoppers across the country are suffering pangs of anxiety as one of the fashion industry’s top footwear designers may no longer own the company that bears his name. Steve Madden Ltd. may be put up for sale as the company’s stock values continue to depreciate as a result of a lack of confidence in the company while its namesake faces mounting a defense in three cases. While the New York-based company has not been accused, it has even gone so far as to hire Bear Stearns to help advise it on its options.

While Bear Stearns coming on board as financial adviser picked up the stock rate to $8.75 before the Nasdaq closed for the day, this is down $13.90 since prior to the legal difficulties faced by Madden were announced this spring. It was in June that the Manhattan US Attorney’s office charged Madden with securities fraud and money laundering for allegedly helping two brokerage firms rig stock prices. Madden allegedly helped to manipulate the prices of 31 initial public offerings, one of them for his own company. Shareholders also filed a suit in Brooklyn against Madden and the Securities and Exchange Commission also filed a suit.

With the first trial not scheduled until April of next year, there is plenty of speculation already brewing about the extensive collection of retail properties leased by the defendant’s company should they sell. Madden has reportedly lost $33 million as his 21% of the stock in the company suffers the downturn in value. The company’s revenue last year was $163.04 million and now could fetch about $96 million.

Including its flagship store at 540 Broadway, known as the SOHO shop, there are four Manhattan shops, three others in the outer boroughs, two on Long Island and one in Westchester. There are 39 retail stores across the country outside of New York State. In a tight market, particularly in Manhattan, any available retail space is good news for tenants. Whether or not a sale would mean these spaces would be vacated remains to be seen. No one from Madden’s company returned calls by press time, but there are rumors that a number of companies might be interested, including Tommy Hilfiger and several young-adult targeted clothing retailers. None of this could be confirmed.

One panelist at the NAREIT convention held recently in Washington, DC had noted with regard to retail space, “Would you rather be the retailer who is subject to the fickle fashion business or the property owner who holds the lease?” He said that investors and the stock market often favored the retailer. In this case, it is not the fickle fashion market that has driven down values. Here the legal woes of the designer have led to the depreciation of the company as a whole. Should the company go on the block and the stores be vacated, it seems the property owners will prove their position as winner in this case, holding valuable real estate in a market in which people are desperate for space.

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