Skechers Takes $9 Billion Buyout as Shoe Stocks Skid

A buyout looks like a salve for shoe companies down on their heels as a result of tariffs. 

Skechers, known for its comfortable and affordable sneakers, has agreed to a $9.4 billion deal to be taken private by 3G Capital. The company’s stock jumped 25% on Monday, closing in on the per-share buyout price of $63.

For Sale: Good Shoes, Unforeseen Circumstances

Shoe stocks hit the skids this year as the footwear industry started to digest the potential impact of the Trump administration’s trade policy. Nearly all of the shoes sold in the US are sourced internationally, primarily from China, Vietnam, and Cambodia, making tariffs particularly existential for shoemakers.

A letter published last week from the industry group Footwear Distributors & Retailers of America, and signed by dozens of companies from Adidas to VF Corp, asked President Trump for a reprieve. “We are in fact the one industry where tariffs do not significantly increase domestic production; tariffs just become a major impact at the cash register for every family,” it read.

While athletic sneaker shops like Nike and Under Armour have been charting turnaround plans to revitalize flagging sales, Skechers has been gaining traction as a brand and progressing toward its goal of $10 billion in revenue by 2026. According to Stifel, Skechers sources 40% of its products from China.

The Manhattan Beach, Calif.-based company’s shares tumbled from highs in February after it reported a more challenging macroeconomic environment in China, with sales in the country declining in its fiscal fourth quarter. In late April, CFO John Vandemore compared the level of uncertainty Skechers is facing to the early phases of the COVID pandemic. The company also withdrew its 2025 guidance, citing uncertainty stemming from global trade policies.

3G Capital’s buyout of Skechers is the biggest in footwear history. PitchBook’s data on buyout activity in the global footwear industry shows how the deal ranks with others:

• Hong Kong-listed Belle International was taken private in a $6.8 billion deal led by private equity firms Hillhouse Capital Group and CDH Investments in April 2017.
• Birkenstock sold a majority stake to LVMH-backed private equity firm L Catterton for $4.8 billion in February 2021. Adidas sold Reebok to Authentic Brands Group (ABG) for $2.5 billion in August 2021.

A steal: 3G Capital’s deal for Skechers could look like a bargain if the Trump administration backs down on tariffs or exempts footwear brands.