Skechers goes private in record $9.42 billion deal amid tariff struggles

[WORLD] Skechers is set to exit the public markets after 26 years, agreeing to a US$9.42 billion (S$12.2 billion) buyout by 3G Capital—the largest takeover in the footwear industry to date—as the brand contends with mounting pressure from steep U.S. tariffs.

The deal comes at a critical juncture for the footwear sector, which is being reshaped by shifting trade dynamics and evolving consumer preferences. Known for its mid-tier pricing and comfort-focused designs, Skechers has built a devoted following. However, analysts point out that its heavy dependence on Chinese manufacturing has left it particularly exposed to recent tariff increases. Going private could give the company room to overhaul its supply chain strategy away from the public market spotlight.

On May 5, Skechers announced that 3G Capital would acquire the company for US$63 per share in cash—a 28% premium over its May 2 closing price, according to Reuters calculations.

The announcement sent Skechers shares soaring 25% to US$61.86, recovering some of the ground lost after the stock plunged nearly 30% earlier this year. The decline followed the company's April decision to withdraw its annual forecast and issue a warning about the impact of President Donald Trump’s sweeping 145% import tariff on Chinese goods.

The tariffs, a centerpiece of escalating U.S.-China trade tensions, have taken a heavy toll on footwear brands. Industry groups warn American consumers could see shoe prices rise by as much as 20%. With more than 70% of its products made in China, Skechers has begun exploring production shifts to countries like Vietnam and Indonesia. But supply chain transitions have been hampered by logistical challenges and limited manufacturing capacity.

China remains the dominant source of imported goods for Skechers' U.S. operations. Needham analyst Tom Nikic suggested that ongoing trade and macroeconomic volatility may have accelerated the buyout talks, adding that Skechers might prefer to navigate these challenges outside the scrutiny of public investors.

The acquisition marks a rare entry into the footwear and apparel space for 3G Capital, a private equity firm traditionally focused on consumer staples such as food and beverages. Known for driving cost efficiencies in companies like Kraft Heinz, 3G’s involvement could help Skechers offset tariff impacts—but some observers caution that the firm’s aggressive cost-cutting style may not align with Skechers’ growth-oriented model.

Skechers, along with Nike and Adidas America, has lobbied President Trump to exempt footwear from retaliatory tariffs, warning that rising import costs are squeezing margins and forcing consumers to curb spending.

Founded in California in 1992, Skechers first gained traction with men’s streetwear, debuting with the “Chrome Dome” shoe. Over the years, it has transformed into a global comfort footwear leader, bolstered by celebrity endorsements, international expansion, and recent sustainability initiatives—including the launch of eco-conscious product lines.

Despite intense competition from established giants like Nike and upstarts such as Hoka, Skechers has managed to hold its ground. Its global footprint now includes approximately 5,000 retail locations across more than 120 countries.

Nikic described the deal as “very surprising,” noting that Skechers has long been seen as a “family business,” with the Greenberg family deeply involved in daily operations.

Under the terms of the acquisition, founder and CEO Robert Greenberg, 85, will remain at the helm, joined by president Michael Greenberg and COO David Weinberg, who will also retain their positions. This continued leadership suggests that 3G Capital sees value in the Greenbergs' longstanding industry expertise. However, questions persist about whether the family will maintain full operational autonomy, given 3G’s history of installing its own executives post-acquisition.

According to sources cited by Reuters, the deal was not part of a broader auction process, but rather a bilateral agreement reflecting a long-standing relationship between 3G Capital and the Greenbergs.

3G Capital, controlled by Brazilian billionaire Jorge Paulo Lemann, is best known for its investments in food and beverage giants, and its expansion into footwear signals a potentially strategic shift.