Skechers footwear company to undergo private status transition, valued at approximately $9 billion in acquisition deal.
Skechers, the footwear giant, recently disclosed its agreement to be sold to investment firm 3G Capital for a whopping $9.4 billion. This move comes at a critical juncture for the company as they grapple with the fallout from steep US tariffs and erratic trade policies.
The deal values Skechers' shares at $63 each, offering a 28% premium over the stock's closing price on Friday. The announcement triggered a surge in the company's share price, which rocketed over 25% premarket to $61.90.
In a bid to dodge the tariff storm, Skechers had previously withdrawn its annual results forecast last month. The Trump administration's aggressive trade policies have stirred up turbulence in the international economy and hammered consumer confidence. With China being a significant supplier for Skechers' US operations, the eye-watering 145% tariffs on Chinese goods have hit Skechers where it hurts.
3G Capital, controlled by Brazilian billionaire financier Jorge Paulo Lemann, is renowned for flexing its investment muscles in the food and drinks sector, particularly through Kraft Heinz. The transaction is slated to wrap up in the third quarter of 2025 and will be bankrolled by a mix of funds from 3G Capital and debt financing secured from JPMorgan Chase Bank.
The tariff turmoil isn’t just a Skechers problem; it’s a broader symptom of a bumpy global economic ride triggered by tariffs that kicked off in 2021. Skechers’ supply chain costs have swelled due to the tariffs, pinching their profits and forcing them to up prices for consumers. They’ve been navigating these challenges by shifting some of their manufacturing to countries like Vietnam and India, but that comes at a significant cost and operational hurdles.
On a grand scale, tariffs have generated chaos in international trade relations, sparked inflation, and created uncertainty for multinational corporations. Other big players like Ford have signaled financial bruises due to tariff impacts, indicating a ripple effect that’s far from limited to consumer goods.
The ongoing threat of tariffs and unpredictable US trade policies have cast a shadow over long-term investment and strategic planning for corporations around the world. Coupled with a strong US dollar, the effects of tariffs on imported goods have intensified, increasing operational costs and diminishing competitiveness for prominent brands like Skechers.
In an ever-changing landscape, Skechers, like several other global brands, continue to adapt and adjust their strategies to stay afloat in the tempestuous waters of the US trade policy arena.
- Despite struggling with the impact of US tariffs and the subsequent increase in their supply chain costs, Skechers has secured a capital influx through its agreement with 3G Capital, which will be partially financed by debt from JPMorgan Chase Bank.
- The financial implications of tariffs have not only affected Skechers but have also caused financial difficulties for other multinational corporations, creating uncertainty for long-term investment and strategic planning.
