I’ll touch on our unique capability in footwear and accessories and tell you how it is that we believe we’ve been able to get the fashion right so consistently, season after season. I’ll show you how all this has translated into exceptional financial performance over the last several years, as well as a pristine balance sheet.And finally, I’ll take you through the host of growth opportunities, which we believe will enable us to continue to drive top and bottom line gains in the years to come. So when you think about value drivers at Steve Madden, the very first thing that comes to mind is the strength and power of our flagship brand, Steve Madden. Steve Madden has the leading market share in its department in the department stores, that share is currently over 23% of the junior department. If you add our- the other brands that we own, Madden Girl and Report, we’re up over 30% of the junior department in the department stores. And even if we expand the universe to all fashion footwear brands in the department stores, Steve Madden ranks behind only Ugg, retail and private labels in total, and Coach, so pretty good company. In addition to a leading market share, Steve Madden also has a leading mind share. In this survey of upper income teens, when girls were asked their favorite footwear brand, Steve Madden ranked number one ahead of brands even, ahead even of Nike. So we feel that we have a pretty strong engine at the core of our company in the Steve Madden brand. But what we’ve also done, is assembled a diversified portfolio of other brands that allow us to reach customers shopping at all tiers of distribution, from mass all the way up to luxury. I think this chart really illustrates how we use our owned and licensed brands to sell everybody from Wal-Mart at the top, all the way up to Neiman Marcus, excuse me, Wal-Mart at the bottom all the way up to Neiman Marcus at the top and virtually everybody in between.
Now let’s touch briefly on our business model. Wholesale accounts for 85% of our net sales and the balance of our sales come from our company-owned retail stores. We currently have 96 company-owned retail stores including two e-commerce stores.We also have two businesses that have recorded other income on the income statement, so they don’t contribute to the top line but they do contribute to operating income, those being our first-cost business, where we act as a buying agent in procuring private-label footwear for various retailers and our licensing business where we collect royalty income for the use of our brand names on various products. As I mentioned earlier, over the last several years, we have been working to diversify each of our principle segments. You can see that back in 2005, our wholesale business was comprised 100% of footwear sold in the US. Today, approximately 28% of our business is done in accessories and in our growing international business. Similarly, in retail, we were 96% bricks and mortar, only 4% e-commerce back in 2005, whereas today we’re up almost to 20% e-commerce in our direct-to-consumer channel. Our success in all of these brands, channels and businesses is predicated on our unique ability to create trend-right footwear and accessories and deliver them to market in a timely fashion. So how have we been able to do that so consistently? Number one, we do believe it’s a testament to our design team. We think we’ve assembled the best design team in the industry, led of course by our founder, Steve Madden. But in addition to that, there are a couple things about our business model that differentiate us from our competitors and help us to mitigate fashion risk. The first is our test and react model, where we test products in our retail stores and leverage selected winners into the wholesale channel. Read the rest of this transcript for free on seekingalpha.com