U.S. footwear giant Skechers to be sold under shadow of Trump's tariffs

LOS ANGELES, May 5 (Xinhua) -- Skechers, the third-largest footwear firm by sales in the United States, announced Monday it would be sold in a deal valued at 9.4 billion U.S. dollars, days after the company signed a letter warning the country's footwear industry could be totally damaged by the huge tariffs imposed by the White House.

According to a joint statement by Skechers and the private equity firm 3G Capital, the latter would pay 63 U.S. dollars per outstanding share for Skechers in a deal both companies expect to close later this year, valuing the footwear brand at 9.4 billion dollars.

They said Skechers would become a privately held company once the deal closes, as Skechers' chief executive Robert Greenberg would remain in the role and continue overseeing the company's strategy.

In Monday's press release announcing the deal, the companies did not mention the potential impacts of U.S. President Donald Trump's tariffs on its business. However, all news outlets linked the deal to the tariffs since almost all the company's sales last year came from shoes made in Asia and about two-thirds of the revenue came from sales outside the United States.

This deal occurred amid tumult in the industry. Skechers signed a letter issued on April 29 with Nike and Adidas and others, warning the president that his tariffs policy posed an "existential threat" to the U.S. footwear industry.

The Footwear Distributors and Retailers of America, along with more than 80 leading U.S. footwear firms, on last Tuesday sent a letter to Trump urging him to exempt footwear from his administration's so-called "reciprocal tariff" plan.

"We are hit particularly hard by the tariff actions, because the U.S. government already places a significant tariff burden on our industry before any new tariffs are added," the letter read.

The letter cited children's shoes as example, saying which had "rates of 20 percent, 37.5 percent, and higher, before accounting for the reciprocal tariffs" and the new tariffs forced the companies to pay tariffs ranging from "more than 150 percent to nearly 220 percent."

The letter noted that Trump's tariffs "would not drive shoe manufacturing back to the U.S." On the contrary, the new tariffs would remove the "business certainty" that the industry needs in order to take on significant capital investment in the machinery and materials to produce shoes in the United States.

These companies, including Nike, Adidas, Skechers, among others, warned that they were "deeply concerned about imminent U.S. footwear job losses, added costs for consumers, and reduced consumer spending that will fundamentally hamper our industry and harm the entire U.S. economy."

Skechers has about 5,300 retail stores worldwide, about 1,800 company-owned. The company reported a record 9 billion dollars in revenue in 2024 with net earnings of 640 million dollars.

The Southern California-based company's stock tumbled in recent months amid tariff concerns. The company's first-quarter results missed Wall Street's expectations.

In April, Skechers also pulled its full-year outlook while citing "macroeconomic uncertainty stemming from global trade policies," as CFO John Vandemore likened the economic environment to the pandemic, suggesting the company was mitigating the impact of Trump's tariffs by sharing costs with vendors and adjusting prices.