Steve Madden Can’t Stomach Tariffs Alone as It Plans Price Hikes

(Bloomberg) -- Add Steven Madden Ltd. to the growing list of retailers who can no longer stomach the cost of rising tariffs.

The footwear and handbag maker, which had warned last summer that price hikes were a real possibility, is in the “early stages” of raising prices by low single digit percentages, Chief Executive Officer Edward Rosenfeld said in the company’s second-quarter earnings call.

“We think that the consumer will be able to handle that,” he said after the company reported adjusted earnings per share that beat the average analyst estimate.

When President Trump’s tariffs on Chinese handbags had been 10%, the company was able to offset the impacts by moving more output out of the country into places like Cambodia and by asking for factory price concessions from its producers inside China. But when the U.S. raised that rate to 25% in May, Steve Madden realized there was “no way” it could mitigate that entirely, Rosenfeld said.

The company, along with more than 170 shoemakers and retailers, signed an open letter to President Trump in May asking him to remove footwear from the list of the additional $300 billion of goods from China.

“Pricing increases will continue next year and earnings will be muted for this space,” Laurent Vasilescu, an analyst at Macquarie Capital USA, said in a phone interview after the call. Across the whole industry, “we’re going to need to see some price inflation, particularly around accessories.”

To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net

To contact the editor responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net

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