Bakers Footwear Group, Inc. has announced that effective Aug. 26, 2010, it obtained a $5 million debt and equity investment from its vendor Steven Madden, Ltd.


Bakers reportedly received net proceeds of approximately $4.6 million, net of transaction expenses, and will use the proceeds for working capital purposes. The $5 million note bears interest at 11% with principal payments due during 2017 through 2020 and is subordinate to Bakers' other outstanding debt. Steve Madden will also be issued 1,844,860 shares of common stock as additional consideration for the loan, providing it with a 19.99% equity interest in Bakers. Steve Madden has agreed to vote its shares in the same manner as Peter Edison, Bakers' CEO.

“We are pleased to expand our 20-year partnership with Steve Madden, one of our largest suppliers, to include a financial investment,” said Peter Edison, CEO of Bakers. “This investment has no financial covenants or sourcing, management, or governance conditions of any kind and represents a strong vote of confidence in our business. Bakers has had a business association with Steve from the day he started his company, and we look forward to continuing our excellent and enduring relationship with him and his team.”