Fashion operator Steven Madden said that second quarter net income was US$10.5m, down 17.3% on the prior year quarter due to challenges for its Candie's, Daniel M Friedman and Steve Madden Men's segments.

Second quarter net sales were $108.3m compared to $129.5m last year, with revenues from its wholesale business down to $78.6m from $96.2m in the corresponding period last year. The decrease is principally due to softer sales in Daniel M Friedman & Associates, Candie's and Steve Madden Men's, as well as the discontinuation of the Rule, lei and Jump brands, the company said.

Retail revenues were $29.6m compared to $33.3m in the second quarter last year. Same store sales decreased 13.0% versus an increase of 3.0% in the second quarter of 2006.

For the first six months of fiscal 2007, net sales were $214.9m compared to $237.8m in the comparable period last year. H1 net income totalled $20.0m compared to $23.6m last year.

"We experienced a challenging sales environment during the second quarter which, combined with a lack of big fashion trends, negatively impacted the performance of certain segments of our wholesale division as well as our retail division," said Jamieson Karson, chairman and CEO. "While we experienced challenges in our Candie's, Daniel M Friedman and Steve Madden Men's segments during the quarter, we generated sales increases in Stevies, Madden Girl and Steven by Steve Madden. Moreover, we managed our business very prudently, and our focus on effectively managing our inventory and increasing efficiencies is reflected in our ability to maintain our gross margin and reduce operating expense dollars on a year over year basis."

The company now expects net sales for the year to decline between 2% and 4% compared to 2006.