Skechers is being acquired for over $9 billion by the investment firm 3G Capital, resulting in the company becoming a private entity.
The big picture: The acquisition occurs amidst uncertainty regarding the impact of President Donald Trump’s tariffs on companies producing goods overseas, particularly in countries like China where many athletic shoe manufacturers have substantial production operations.
- The offer of $63 per share for Skechers represents a premium of 30% to Skechers’ 15-day volume-weighted average stock price, and the deal was unanimously approved by Skechers’ board, leading to a 25% increase in the company’s shares, reaching $61.56.
- Approximately two-thirds of Skechers’ revenue comes from sales outside the U.S., with China accounting for 15% of the company’s revenue.
Go deeper: Skechers’ executives have highlighted the necessity to minimize products originating from “high-cost locations,” with a focus on mitigating the impact of tariffs. They outlined several strategies, including cost sharing with vendors, sourcing optimization, and price adjustments, to cope with the tariffs.
- As a response to increased tariffs, Skechers is considering optimizing the global cost of tariffs in all markets by potentially moving production and strategically addressing the high effective tariff rate, particularly for products being imported from China to the U.S.
- The company currently operates approximately 5,300 retail stores globally, with around 1,800 being company-owned.
- Despite the challenges posed by potential tariffs and domestic production costs, Skechers reported a record $9 billion in revenue in 2024, with net earnings of $640 million.
What we’re watching: Upon the completion of the acquisition, the company will continue to be led by Skechers Chairman and CEO Robert Greenberg and his management team, with its headquarters remaining in Manhattan Beach, California.
- The deal with 3G Capital is anticipated to close in the third quarter of the same year, marking a significant shift for Skechers as it transitions into a privately-held entity.
