Our guest blog today comes from Shopify Plus' Jason Buckland with their new podcast "In Conversation with Shopify Plus".
There is no one quite like Steve Madden, the bombastic, candid footwear mogul whose name is on a few hundred shoe stores across the world.
In the new podcast In Conversation with Shopify Plus—which features the very best and brightest in business, like Dani Reiss (president and CEO of Canada Goose), Tim Brown (co-founder and co-CEO of Allbirds), Chip Wilson (founder of Lululemon), and Dylan Lauren (founder and CEO—and Ralph Lauren’s daughter—of Dylan’s Candy Bar)—Madden goes deep why there will never be a replacement for retail stores, what he thinks of “The Wolf of Wall Street,” the famous Leonardo DiCaprio movie that features the story that led to his downfall, and his return from addiction and 31 months behind bars.
“First of all, getting out of prison—it's the greatest feeling,” he says. “For the first month, you're floating in the air.”
Check out the podcast here, and below are three key exchanges on enterprise business from Madden’s episode:
Why there’s no replacing retail
Shopify Plus: Steve Madden has more than 220 stores worldwide, and most of them are back open now—at least in some capacity. Stores right now are obviously giving companies fits in some ways because they cost quite a bit of money to run, and for a little while longer still they're simply not pulling near the volume they used to. What does Steve Madden need from its stores in the short term right now to weather this storm?
Madden: It's a very tough time, but there's no replacement for a great store where you put your merchandise in and people come in and touch and feel it. Unfortunately, less people are in the malls, and there's capacity requirements, so that's unfortunate. But there's nothing like a store. Nothing. I can't wait for us to be back.
There's a lot of slagging stores off these days—it's clicks, not bricks. And I don't agree. We have a great internet business, which we're partners with [Shopify Plus], but there's nothing like a great store where people can smell it and touch it and feel it. I'll never get tired of that.
On investing in people, and the right hires to grow a business
Shopify Plus: The irony in hindsight is that, thanks to Stratton Oakmont, the IPO was a huge success. The Steve Madden share price takes off, and before it comes crashing down for you personally sometime later, for the first time in your life you have real wealth and real capital. At that time, what were the right things you were doing with that money to grow the business?
Madden: I guess it was just investing in people. I would hire a little more people than the business could afford, but I knew that I was building into it. So that was where the money went. I remember [when] I had maybe nine employees thinking, “How the hell am I going to afford all these people?” And it was a bit of a three-ring circus for a while, but it worked out [and] expanded into all these things.
The obvious [hire] would be a numbers person. I did that very early on. My third hire was this accountant, he's the CFO, and he's retiring this year—71 years old. We've had an amazing run together, 30 years. He was like my third guy, and he just was able to organize the place financially, which companies my size are very sort of slapdash in that respect. That was another thing. I was ahead of the curve financially because of this guy. That was another just serendipitous move on my part. I had no business hiring a guy like that when I was selling 300 pairs of shoes a day. So it all kind of worked together. Sometimes you need luck in business.
On what not to do when taking a business global
In the time after your release from prison, Steve Madden really goes global for the first time, thanks in large part to the efforts of your brother, John. And in doing so, your store count and revenue have shot way up into the stratosphere since. What were the do's and don'ts about international expansion as your company learned them?
Madden: Don'ts would be not to put too much in between you and the customer. What we would do initially is, we would sell shoes to a distributor, who would sell them to someone else, and then the customer would get them. And that model didn't hold up because the customer needed a [distributor] who was buying [the shoes]. [But] it needed to be a good price and it needed to have value. And if you're padding all those people in it, sometimes [it] doesn't work. So I think that's the don't.
And what were the best things you did in going international?
Madden: When you're dealing with the Southern hemisphere, try to sell as many sandals as you can (Laughs). That was a shocker for me—something so little and common sense. In Mexico, they sell sandals. In Puerto Rico, they sell sandals. “Wait, you don't like my boots?” “No, we don't sell that here. It's hot 12 months a year.” So you have to learn the rhythm of the countries.