[By Guancha Observer Network, Deng Jun; Edited by Zhao Qiankun]
Can the American sports brand Skechers, acquired at the highest price in the history of the global footwear industry, cope with the challenge of high tariffs in the United States?
According to reports from Reuters, the Financial Times and other foreign media, on May 5th Eastern Time, Skechers has agreed to be acquired and taken private by 3G Capital for $9.42 billion. According to the agreement, 3G Capital will acquire Skechers at $63 per share in cash, which represents a 30% premium over the company's 15-day volume-weighted average stock price. After the transaction is completed, Skechers will delist from the NYSE and become a privately held company. On the day of the US stock market opening, Skechers' stock price rose more than 25% at one point, setting its largest increase since 2017.
In the first quarter financial report released in April, Skechers had already shown signs of business difficulties. Due to the intensification of global trade disputes, Skechers not only withdrew its 2025 annual earnings forecast but also clearly warned that the tariff policy of the Trump administration on Chinese goods was posing a serious challenge to its business growth.
Reuters: The Largest Privatization Deal in Industry History
Skechers, headquartered in California, was founded in 1992. Initially focusing on men's street style and opening up the market with its iconic shoe "Chrome Dome," it later gained global consumer favor with its comfort-oriented athletic shoes. Currently, the company has approximately 5,000 retail stores in over 120 countries worldwide.
3G Capital is a renowned investment company in the consumer goods sector, controlled by Brazilian billionaire financier Jorge Paulo Lemann. It is a shareholder of Anheuser-Busch InBev, the beer group, and Burger King, the fast-food chain.
This privatization deal of Skechers, according to Reuters, marks "the highest acquisition amount ever in the global footwear industry so far."
Skechers retail store Visual China
The Reuters report stated that 3G Capital provided two options for Skechers' shareholders: a full cash acquisition at $63 per share, or $57 in cash plus part of the equity in the parent company after privatization. The transaction has been unanimously approved by the Skechers board and is expected to be completed in the third quarter of this year.
After privatization, the current management of Skechers—Chairman and CEO Robert Greenberg, President Michael Greenberg, and COO David Weinberg—will continue to lead the company and implement the existing development strategy.
Analyst Tom Nikic of Wall Street investment firm Needham pointed out that under multiple uncertainties such as tariff pressure, weak consumer confidence, and geopolitical factors, the negotiation process may accelerate, and Skechers may hope to complete the relevant transactions as soon as possible without scrutiny from Wall Street.
However, an analyst from TD Cowen proposed a different view: "If 3G Capital's cost-cutting and efficiency-enhancing strategies succeed in boosting Skechers' profit margins, there is a possibility that Skechers could return to the securities market at some stage in the future."
In the face of global trade uncertainty, the Chinese market remains crucial.
The uncertainty of global trade policies is like the Sword of Damocles hanging over Skechers' head.
On April 25th Beijing time, Skechers' first-quarter 2025 financial report showed: the sales revenue for the period was $2.41 billion, an increase of 7.1% compared to the same period in 2024; calculated in constant currency, sales revenue was $2.46 billion, an increase of 9%; net income was $202.4 million, slightly lower than $206.6 million in the same period last year; regionally, sales in Europe, the Middle East, and Africa grew by 14%, and sales in the Americas increased by 8%.
Despite the impressive performance of Skechers globally, its sales growth in the largest overseas market, China, has significantly slowed down.
Since entering the Chinese market in 2007, Skechers' operations in China have been managed by a joint venture between Skechers USA and the Hong Kong-based Link Treasure Group in mainland China—Skechers China. To date, Skechers has opened nearly 3,500 offline stores in China and established a comprehensive online and new retail network system covering all channels.
According to previous introductions by Chen Weili, partner of Skechers China and CEO of Skechers China, South Korea, and Southeast Asia, to flexibly adapt to the Chinese market, Skechers has deeply localized its supply chain in China. 90% of the products sold in China are "Made in China."
In the first quarter of 2025, Skechers' sales in the Chinese market decreased by 16%, far exceeding the 11.5% decline in the previous quarter.
According to Skechers' 2024 financial plan, it is expected to reach a global annual sales target of $10 billion (approximately RMB 72.177 billion) by 2026, with the Chinese market contributing RMB 30 billion. This means that the Chinese market is a key pillar of Skechers' billion-dollar sales goal.
According to a report by the Financial Times of the UK, despite the decline in sales in the Chinese market, COO David Weinberg still emphasized the long-term potential of the Chinese market and promised to continue investing in product research and development, marketing promotion, and infrastructure to expand and support its business in China.
However, due to the economic uncertainty brought about by global trade policies, Skechers withdrew its 2025 fiscal year earnings guidance. This move raised concerns in the market about the resilience of Skechers' supply chain.
The report mentioned that due to the high concentration of production bases in the Asian region, Skechers was severely affected by the Trump administration's tariff policies.
Related data shows that in 2024, the US market accounted for 38% of Skechers' global sales, while Asian countries bore the main production capacity.
Skechers' recent securities filings stated bluntly that the tariff policies of the Trump administration posed significant risks to the company's business operations, potentially leading to compressed profit margins, higher shoe prices, and reduced demand.
Under pressure, American shoemakers are taking joint action.
According to reports by Reuters, CNBC, and other media outlets, on April 29th local time, the Footwear Distributors and Retailers of America (FDRA) joined Nike, Adidas, Skechers, Under Armour, and 72 other shoe brands in sending a letter to the White House, requesting an exemption from reciprocal tariffs on footwear.
FDRA warned that previously, the tariff rate for children's shoes had reached 20%-37%, and if new tariffs were added, the overall industry tax rate might reach 150%-220%, potentially causing "hundreds of shoe companies to go bankrupt" and "shortages of footwear inventory across the United States."
Adidas warned earlier this week that tariffs would result in higher prices for American consumers. Nike's CFO warned in late March that global tariffs and economic uncertainty would lead to a decrease in sales for the current quarter.
This article is an exclusive contribution by the Guancha Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7501290775994253861/
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