Retail billionaire Solomon Lew has launched legal proceedings which could result in the closure of Australia’s 15 Steve Madden footwear stores.
Lew Footwear Holdings is suing Madden International in the Victorian Supreme Court.
The proceedings concerns a dispute between Lew, estimated to be worth more than $2 billion, and the company founded by convicted fraudster Steve Madden.
Madden founded his shoe empire in 1990 but was sentenced to 41 months in prison for stock fraud (he served two and a half years).
Madden is now creative and design chief of Steve Madden Limited which owns Madden International.
The Australian reports the legal proceedings are aimed at tearing up the licensing agreement between Lew Footwear Holdings and Madden International.
The dispute centres around an agreement which allowed Madden International to claim a markup of up to 13% on the shoes it was onselling to Lew Footwear.
Lew alleges manufacturer invoices left inside the boxes of the shoes bought from Madden International showed some shoes were marked up by up to 35%.
Lew claims to have lost more than $6.7 million in margins from incorrectly applied mark-ups.
He is seeking about $7.5 million to $8 million in lost earnings according to The Australian and wants to shut down Australia’s 15 Steve Madden stores which currently employ 100 people.
Leneen Forde of Sladen Legal, is representing Madden International in the proceedings and told SmartCompany Lew’s claims will be defended.
“Our client’s position is that there is no merit in the claims being pursued by Lew Footwear,” she says.
“The claims will be defended and Madden International will pursue its own claims against Lew Footwear in the appropriate forum.”
Lew purchased Steve Madden’s Australian arm after it collapsed into administration in 2009.
He failed to respond to SmartCompany’s request for comment prior to publication.
A directions hearing is listed for November 14.