May 23 - Shoemaker Steve Madden said it bought privately held Topline Corp for $55 million in cash, in a bid to bolster its private label footwear business.

Steve Madden footwear

The transaction is expected to add 5-7 cents to earnings in its first full year under Steve Madden ownership after giving effect to the company's recent 3-for-2 stock split.

The deal also includes an earn-out provision based on financial performance through June 30, 2012.

"Topline's private label business is one of the best in our industry and is highly complementary to our existing private label footwear business," Chief Executive Edward Rosenfeld said in a statement.

Topline reported 2010 net sales of about $189 million while Steve Madden's estimated net sales for 2011 is $770.6 million, according to Thomson Reuters I/B/E/S.

In addition, Steve Madden also expects to benefit from Topline's direct sourcing platform.

Steve Madden, whose lines include flagship brand Steve Madden, Stevies and Candies, had cash and cash equivalents of $60.4 million, as of March 31.

Founded in 1980, Topline sells its footwear primarily to specialty retailers and department stores.

The company's owned brands include Report, Report Signature and R2 by Report.

Shares of the Long Island City, New York-based company, closed at $53.05 on Friday on Nasdaq.

(Reporting by Abhishek Takle in Bangalore; Editing by Sriraj Kalluvila)