Skechers is fleeing the public market and hunkering down by going private during the middle of a trade war.
The company announced Monday that investment firm 3G Capital will buy Skechers for $9.4 billion. 3G will pay $63 a share for the brand, a 30% premium of the company’s stock.
“With a proven track-record, Skechers is entering its next chapter in partnership with the global investment firm 3G Capital,” Skechers CEO Robert Greenberg said in a statement. Skechers’ stock jumped 25% on the news.
Skechers, based in Southern California with 5,300 US stores, is the third largest shoe company in the world. The company is getting off the public market as President Donald Trump’s tariffs, which include 145% duties on Chinese imports and a 10% minimum tax on all other countries, are slamming the footwear industry. Analysts say the trade war influenced the company’s move to go private.
Heading into Monday, Skechers shares had fallen 26% this year over fears of the impact of tariffs on the company. That made the company an attractive target for 3G Capital, said Neil Saunders, an analyst at GlobalData Retail.
Even with the premium 3G is paying for company’s shares, Skechers still isn’t worth as much as it was at the start of the year.
Other struggling companies may see the writing on the wall and look to escape the public market during this moment of volatility, analysts say.
Sneakers highly exposed to tariffs
Ninety-nine percent of all shoes sold in the United States are manufactured overseas, according to the Footwear Distributors and Retailers of America, an industry group.
Skechers manufactures all the shoes it sells in the United States abroad, with around 40% from China, according to analysts. Skechers’ children’s shoes are mainly made in China. The company last month withdrew its financial guidance due to uncertainty around tariffs.
Skechers, Nike, Under Armour and other sneaker giants urged Trump to exempt the footwear industry from tariffs in a letter last week. The companies warned that the import taxes could wipe out hundreds of businesses, kill tens of thousands of jobs and raise prices for consumers.
“American footwear businesses and families face an existential threat from such substantial cost increases,” the companies said. “This is an emergency that requires immediate action and attention.”
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