There's no business like the shoe business, but can a designer shoe company
prosper even in recessionary times?

Investors could be asking that about Steve Madden Ltd. (Nasdaq:SHOO), which was up double digits for the year before Monday's market meltdown. After getting scuffed up, Steve Madden stock remains in positive territory for the year - it began 2008 trading around $20 - and is faring better than many small caps.

With a new CEO, some unsolicited offers apparently off the table and a 2.6-million-share buyback via Dutch auction completed, Long Island-based Steve Madden is moving headfirst toward the crucial holiday season.

According to a Thomson Reuters survey of six analysts who cover Steve Madden, five have the stock a "strong buy," with the other at "buy." Shares hit a 52-week high of $29 on Sept. 19, rebounding from a post-holiday low of $14.61 on Jan. 15. Steve Madden closed Thursday at $20.01.

Steve Madden stock was up nearly 14% this year before the recent market turbulence. The economy is a big question mark for the retail sector this upcoming holiday shopping season. Even the well-heeled who frequent Steve Madden's 100 or so stores are feeling the pinch.

Steve Madden standalone stores are mainly in metro areas, but its products are found at many retailers as well as online. Nearly three-quarters of 2007 sales came from its wholesale operations.

The Steve Madden lineup has expanded to include women's apparel and accessories, plus men's shoes. Higher-end products are sold through the company's Steven stores. Recent deals include a licensing agreement with Jones Apparel Group (NYSE:JNY) to put l.e.i. Footware for girls into Wal-Mart Stores (NYSE:WMT), and a contract with Mary-Kate and Ashley Olsen's company to make Elizabeth and James-branded footwear by mid-2009 for luxury retailers.

Founder Steve Madden's 1990 launch is an entrepreneurial legend: the brash New Yorker began with an $1,100 investment, selling one shoe style from his car. So, too, are his 31 months spent behind bars on securities fraud charges related to the initial stock offering of his empire. He heads up the creative efforts.

In August, Steve Madden Ltd. removed "interim" from the title of 32-year-old chief executive Edward Rosenfeld. The wunderkind will have some big shoes to fill, plotting a path through the choppy waters.

Sales growth slowed in 2007, and hasn't picked up substantially this year. For the six months ended June 30, sales shrunk 2.4% as net income was halved to $9.7 million from $20.1 million the year before.  In early August, Steve Madden reiterated prior guidance calling for net sales to finish 2008 flat to up 2%, and earnings per share of $1.39 to $1.49, including a one-time charge recognized in the first quarter.

Following the company's analyst day in mid-August, Wedbush Morgan's Jeff Mintz maintained a "buy" rating and $29 price target on Steve Madden, writing that "the company's success in any season is driven by product and the company's ability to identify and exploit footwear trends. We believe the current product is well positioned for the second half of 2008 ..."

So far, it appears that Steve Madden Ltd. has taken some necessary steps to fend off the stock market crisis. And if you're looking to walk a mile in Steve Madden shoes, it's just possible that the stock won't leave an ugly blister on your portfolio.