Bakers Footwear, www.bakersshoes.com, has managed to develop an intricate market relationship between retail space and customers by offering a robust array of fashion-forward footwear and accessories for style-driven young women ages 16-35 at its national network of some 240 stores.

The Company announced today that it has obtained a $5M debt and equity investment from Steven Madden, Ltd., receiving $4.6M in net proceeds which will be directed towards working capital.

Subordinate to outstanding debt, the $5M note carries 11% interest (principal payments due 2017-2020), and a reported 1,844,860 shares will be issued to Steven Madden in addition, as consideration for the loan, constituting a 19.99% equity interest in Bakers which Madden has agreed to vote in unison with BKRS CEO, Peter Edison.

Edison welcomed the financial investment expansion of this two-decade-old partnership with Steve Madden, one of the Company’s biggest suppliers, and cited the lack of financial covenants or sourcing/governance conditions as a clear and strong vote of confidence in the business.

Edison remarked how nice it was to move forward with a trusted associate like Steve, with whom the Company has done business since the inception of his (Madden’s) company, which is a leading designer and marketing and sourcing expert for the hottest footwear and accessories.

Chairman and CEO of Steve Madden, Edward Rosenfeld, echoed Edison’s sentiments about both the long-standing and trusted relationship between the companies, and the mutually beneficial upsides of the deal.

Other salient details regarding the deal are as follows:

• Customary and other provisions – requirement for note repayment due to change of control, including if Edison ceases to be CEO
• Steve Madden agreed to restrictions on additional transfer or acquisition of Bakers securities
• Entry into various consents, waivers and agreements with senior leadership to accommodate the deal (Bakers’ covenant compliance and greater detail in 8-K filed today)
• Shares made in private transaction under Regulation D (not registered under 1933 Securities Act)
• Agreement made by Bakers to file registration with the SEC upon investor request (subject to conditions covering resale of common stock)
• Shares of common stock may not be reoffered or resold (barring exemption or registration) until such time as the registration statement is validated by the SEC