UPDATE 1-Steven Madden gets control of Betsey Johnson label

Fri Oct 8, 2010 7:47am EDT

* BJ LLC keeps rights to operate Betsey Johnson stores

* Says deal to boost 2011 earnings by $0.10/shr

Oct 8 (Reuters) - Steven Madden Ltd (SHOO.O) took over the Betsey Johnson label in an out-of-court settlement that restructured Betsey Johnson LLC's outstanding loan it had acquired, and said the deal will boost its fiscal 2011 earnings.

American designer Betsey Johnson is known for her whimsical and flamboyant designs for women.

Steven Madden, known for its fashionable shoes, had purchased design house Betsey Johnson LLC's (BJ LLC) $48.8 million defaulted outstanding loan for $27.6 million in late August.

The companies also inked two new license agreements under which BJ LLC will have the exclusive license to operate Betsey Johnson retail stores in the United States, Canada and London, and manufacture and sell specified women's apparel under the Betsey Johnson and other related brand names.

As a part of the transaction, Steven Madden also made a $3 million new secured term loan to BJ LLC, it said in a statement.

Steven Madden shares, which have risen 21.5 percent since Aug. 27 when it bought the Betsey Johnson debt, closed at $43.61 Thursday on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)