3G Capital Buys Skechers for $9.4 Billion in Major Move to Take Company Private
Skechers Goes Private in $9.4 Billion Bet: Inside 3G Capital’s High-Stakes Reentry Into Mega Deals
MANHATTAN BEACH, Calif. — The surf town headquarters of Skechers, better known for laid-back boardwalks than boardroom drama, is now the epicenter of one of the largest consumer retail buyouts in years. Global investment firm 3G Capital has agreed to acquire Skechers in a $9.4 billion take-private deal, a move that jolts both the footwear industry and the private equity landscape.
The transaction, offering shareholders $63 per share in cash — a 30% premium over the 15-day average — or a mix of $57 plus one equity unit in a newly formed parent company, signals not just a return to large-scale M&A for 3G, but a recalibration of its controversial operating style.
With the deal expected to close in Q3 2025, Skechers will delist from the NYSE and retreat from public market scrutiny. But far from a quiet exit, the move thrusts the comfort-focused brand into an entirely new pressure chamber: delivering private equity-style returns without sacrificing the identity that made it a $9 billion sales juggernaut.
“We’re Not Kraft Heinz”: 3G’s Deal-Making Renaissance
This is 3G Capital’s first major deal since divesting its 16.1% stake in Kraft Heinz in late 2022. That retreat came after years of underperformance and a much-criticized zero-based budgeting (ZBB) regime that, critics argued, prioritized margins over innovation and gutted long-term value.
Zero-Based Budgeting (ZBB) is a method requiring every expense to be justified for each new budget period, starting from a "zero base." Unlike traditional approaches, no funding is automatically carried over; all costs must be re-evaluated based on current needs and strategic goals.
Now, 3G returns to the spotlight with a distinctly different tone. Gone is the Buffett-backed, food-conglomerate thesis. In its place: a leaner, more targeted consumer brand, still founder-led, still growing, and still holding white space in a hyper-competitive market.
“I would rather say it is not slashing costs anymore,” said one person familiar with the firm’s thinking. “This is a bet on operational focus, not austerity.”
Privately, some investors see the acquisition as a test case: whether 3G has evolved beyond its slash-and-burn origins and toward a more modern hybrid of growth-oriented private equity investing.
Anatomy of the Deal: Leveraging Leverage
The acquisition will be financed through a mix of 3G Capital’s own funds and debt underwritten by JPMorgan Chase, according to filings. With Skechers generating roughly $1.6 billion in EBITDA, leverage will sit around 6x at deal close — a number that has raised eyebrows but remains within tolerance in today’s still-accommodative debt markets. Skechers (SKX) Historical EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) over the last 5-10 years.
| Year | EBITDA (USD) |
|---|---|
| 2024 | $1.116 Billion |
| 2023 | $966.7 Million |
| 2022 | $700.4 Million |
| 2021 | $737.8 Million |
| 2020 | $294.7 Million |
Did you know? In leveraged buyouts (LBOs), private equity firms often use leverage multiples—like Total Debt to EBITDA—to gauge how much debt a company can handle based on its cash flow. A 4.0x leverage multiple means the company has four times its annual EBITDA in debt. This strategy can significantly boost returns on equity if the investment performs well, but it also increases financial risk, making careful analysis of leverage levels critical to a successful buyout.
Moody’s expects leveraged loans to remain “borrower-friendly” through 2025, with rates stable or slightly easing. Still, analysts caution that even a modest rise in borrowing costs could pressure the math.
A conservative scenario suggests that 3G can achieve $350 million in cost efficiencies by fiscal 2027, largely through supply chain renegotiations and SG&A streamlining. That would bring net leverage below 4x and give the firm room to reinvest in expansion — but the path requires precision.
Why Skechers — and Why Now?
A Founder-Led Brand With Global Upside
Skechers might not have Nike’s swagger or Adidas’ design cachet, but its numbers speak volumes. Fiscal 2024 saw a record $8.97 billion in revenue, with Q1 2025 up 7.1% year-over-year — solid growth for a brand that’s already in 180 countries and over 5,300 stores.
Yet the stock was trading at just 10x forward earnings — a discount blamed on tariff overhangs, a lack of “hype factor,” and its utilitarian brand image.
“Skechers is the workhorse of the footwear world,” said one industry analyst. “That’s exactly what makes it so interesting. People underestimate reliability.”
And with athletic–lifestyle footwear projected to grow from $138 billion in 2024 to over $204 billion by 2034, Skechers’ sub-7% market share leaves room to run.
Table: Global Athletic and Lifestyle Footwear Market Growth Projections (2024-2034)
| Research Source | Current Market Size | Projected Market Size | Period | CAGR |
|---|---|---|---|---|
| Precedence Research | $144.07B (2025) | $204.56B | 2025-2034 | 3.97% |
| GM Insights | $131.1B (2024) | Not specified | 2025-2034 | >5% |
| Business Research Company | $85.25B (2024) | $115.9B | 2024-2029 | 6.6% |
| Running Shoes Segment | $53B (2024) | Not specified | 2024-2034 | 5.4% |
| Total Footwear Market | $495.46B (2025) | $789.52B | 2025-2032 | 6.88% |
Regional Highlights:
- North America: Currently dominates with 82% regional market share
- Asia-Pacific: Fastest growing region with projected CAGR of 4.12% through 2034
3G’s Shift: From Budget-Cutters to Brand Builders?
There is no Berkshire Hathaway co-sign this time — and perhaps that’s intentional. 3G’s Kraft Heinz legacy looms large, particularly the damage caused by deep ZBB cuts that left R&D and marketing gasping.
Some insiders view the Skechers deal as a do-over.
“The mistakes of Kraft weren’t just financial,” noted one private equity consultant. “They were philosophical. You can’t strip a brand to the bones and expect it to innovate.”
Retaining Skechers’ leadership — CEO Robert Greenberg and President Michael Greenberg — and allowing them to roll equity into the new private entity (within the 20% cap) is seen as a strong sign that 3G aims to co-pilot, not control.
Strategic Playbook: Comfort Meets Control
Skechers’ strength lies in its comfort-first reputation and efficient supply chain. But under private ownership, the focus will shift from quarterly earnings to a longer-term transformation — one where direct-to-consumer (DTC), digital channels, and geographic diversification take center stage.
In 2024, Skechers grew its DTC segment by 8–9%, raising its DTC mix to 28%. 3G reportedly plans to push this to 40% by 2027, leveraging mobile commerce, app data, and international storefronts to build margin and loyalty. Skechers Direct-to-Consumer (DTC) sales as a percentage of total revenue over recent years, illustrating the shift.
| Year | Direct-to-Consumer (DTC) Sales (% of Total Revenue) | Source |
|---|---|---|
| 2021 | 29% | |
| 2022 | 38% | |
| 2023 | ~44% (calculated from $3.5 billion DTC sales out of $8.0 billion total sales) |
Tariff risk, however, looms large. The 125% reciprocal US-China tariffs imposed earlier this year have shaved 150–200 basis points from Skechers’ gross margin. 3G is expected to accelerate supply chain migration to Indonesia and India, and to relocate some U.S. distribution infrastructure — both to hedge against geopolitical risk and to claw back lost margins.
Competitive Ripples: Disruption in the Middle Market
| Factor | Short-Term Effect | Medium-Term Outcome |
|---|---|---|
| Tariffs | Upfront margin compression; reshuffling of sourcing contracts | Supply chain diversification restores 50–60% of margin loss |
| DTC Push | More consumer touchpoints; reduced wholesale dependence | Gross margin uplift of ~100 bps |
| Competitor Response | Nike defends share; On & Hoka accelerate | Potential M&A activity, especially in mid-tier brands like Puma |
| Regulatory Oversight | Minimal antitrust exposure due to Skechers' sub-10% share | No major regulatory blocks expected |
Notably, the comfort-lifestyle boom has created an unusually crowded field. On Running reported +29% FY 2024 sales; Hoka grew +35%. Yet both remain niche relative to Skechers, which can now deploy private capital to expand rapidly without shareholder drag.
What Could Go Wrong?
1. Tariff Tightrope
If trade tensions with China worsen — or the EU imposes parallel levies — the fragile economics of the deal could unravel. Skechers still sources heavily from China and Vietnam, and retooling global supply chains takes time and capital.
Tariffs, especially import duties like those in the US-China trade conflict, directly increase operating costs for businesses, including retailers. Consequently, companies must often adjust their sourcing, pricing, and overall strategy to manage these added expenses.
2. Fashion Fatigue
Some industry observers warn of “comfort fatigue.” A shift in consumer taste — from functional to flamboyant — could blunt Skechers’ growth engine.
3. Operational Overreach
If 3G reverts to its cost-cutting extremes, it risks alienating design teams, stalling product innovation, and repeating the Heinz innovation drought. Already lean, Skechers may not have fat to trim without cutting into muscle.
Greenberg Family Stays — But What About Everyone Else?
The Greenbergs — who founded Skechers in 1992 — will retain their leadership roles and are expected to hold a meaningful stake in the new private company. This offers cultural continuity and a vote of confidence.
But others are less secure. Analysts expect a 5–6% headcount reduction, focused on non-design SG&A. Suppliers in China may also feel the pinch as sourcing shifts toward Southeast Asia.
The deal has already cleared over 60% of shareholder voting power, and with regulatory approvals unlikely to face antitrust hurdles, closure in Q3 seems probable.
Exit Scenarios: Private Equity’s Balancing Act
Handled correctly, this could be a textbook case of “growth plus margin.” By 2028, Skechers could post:
- Revenue CAGR of 6%
- EBIT margin rising from 10% to 14%
- Net leverage under 3×, setting the stage for either a high-multiple IPO or strategic sale
Private equity firms realize returns on their investments through various exit strategies, essentially how they sell their stake in a company. Two prominent methods are Initial Public Offerings (IPOs), taking the company public, and Strategic Sales, selling the company to another corporation. Each path offers distinct advantages and disadvantages that firms weigh when deciding how to exit.
That scenario yields a 2.1–2.3× equity multiple — strong in today’s conservative private equity environment and a reputational rebound for Jorge Paulo Lemann.
For Observers and Investors: Four Metrics That Matter
- Tariff Policy: Any trade de-escalation is upside leverage.
- DTC Mix: Watch quarterly updates — >35% by 2026 suggests strategic execution.
- Headcount Trends: Excessive layoffs may hint at operational overreach.
- Competitor Pricing Behavior: A price war from Nike or On could test Skechers’ value proposition.
A Calculated Sprint, Not a Victory Lap
The Skechers deal is not a nostalgic rerun of 3G’s past successes — nor is it a clean slate. It is a complex, heavily leveraged wager on the proposition that Skechers' brand equity, international potential, and retail savvy can absorb a high-octane ownership structure without combusting.
Done right, it could offer a new private equity playbook — one that tempers efficiency with empathy, and growth with discipline. Done wrong, it could be the next Kraft Heinz.
In either case, the stakes are tied not just to a footwear company but to a firm trying to re-engineer its legacy, one deal at a time.