Steve Madden is in trouble again. Now billionaire Solomon Lew wants to shut down 15 Steve Madden stores in Australia on allegations that Madden cheated the Lew family’s Lew Footwear Holdings. Mr. Lew is taking his case to the Supreme Court in Australia, as reported by Australian Business Review, and wants to tear up the deal with Madden.
As part of an agreement between Steve Madden and Lew Footwear Holdings, Madden had the right to claim a markup of up to 13% on the shoes it was onselling to Lew Footwear. However, Lew discovered that many of these shoes had markups of up to 35%. The Lews claim to have lost $6.7 million in margins from the markups, and are suing for $7.5m to $8 m in lost earnings, unquantified damages for lost royalty payments and a breach of agreement under Trade Practices, a violation that could cost up to $20m for Madden. A lawyer for Madden International, Leneen Forde, said, “There is no merit to this claim.”
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This isn’t the first time the popular shoemaker has ended up in hot water. In 2002, he was convicted on a “pump and dump” trading scandal and was sentenced to 41 months in jail for securities fraud.