Board changes, growth in Philippines and China – Footwear News
2021 was a pivotal year for Skechers USA
Despite a global pandemic, supply chain slowdowns and record inflation, the fast-growing shoe brand has managed to keep its business stable, posting consistent results quarter after quarter.
âWe remain confident that as supply chain constraints ease, Skechers will be well positioned to meet the enormous consumer demand for our products,â said Skechers CFO John Vandemore, in a press release announcing the company’s third quarter results.
Throughout the year, Skechers’ wholesale business also directly benefited from a broader industry trend away from retail partnerships in favor of a strong direct-to-consumer model. As Nike, Crocs and other big brands leave their wholesale partnerships, Skechers is making victories in these retail channels.
Skechers’ growth in 2021 is fueling momentum for big changes in 2022.
This month alone, four board members resigned their posts. Skechers also named Zulema Garcia, SVP of Internal Audit at Herbalife Nutrition, on the Board of Directors.
Executives step aside, investors urge Skechers to make changes to drive greater value across the company. Tremblant Capital, which owns 5.1% of the brand, wrote a letter to the board on December 1, asking Skechers to eliminate the majority of management votes, buy back more shares and improve investor relations by paying a dividend, hosting an investor day, and hiring someone to lead investor relations.
âSkechers grew revenue faster than Nike, Adidas, Puma, Under Armor, Crocs and any other relevant peer,â read the letter, which was included in a settlement. deposit. “Despite these impressive facts, Skechers continues to trade at less than half of the earnings multiples of these peers.”
Skechers told the FN he received the letter and was “reviewing and discussing it internally and with the Skechers board.”
The company is already pursuing for-profit changes in other lines of business and is reportedly considering launching an IPO in Hong Kong for its business in Asia, which could raise nearly $ 1.5 billion. The move would build on the company’s particularly strong growth in China, where third-quarter sales were up 10% year-over-year and 36% from the third quarter of 2019. In 2020, Skechers sales in China were $ 924.5 million, or 20% of total sales of $ 4.6 billion for the year, according to an annual report. report.
In an effort to capture the growing Chinese footwear market, Skechers spear a joint venture with Luen Thai Enterprises in 2007 to expand sales and distribution in China under the Skechers China banner. According to Bloomberg, the recent success in China could push Skechers to consider buying Luen Thai and launching an IPO for the region.
As recently as last week, Skechers announced plans to move its operations in the Philippines from a third-party distributor, Trendworks International, to Skechers USA Philippines, Inc.
According to Skechers USA Philippines Country Manager Suzette Pasustento, Skechers is working to “re-brand the market” by launching new offices, a distribution center and the first new store this month.
Pasustento said the company plans to open 10 to 12 more concept stores in 2022 and launch new categories and marketing campaigns.
âThe Philippines has immense potential for Skechers, and with our dedicated team focused on growing and delivering the integrated capabilities of Skechers, we believe this step accelerates that potential,â said David Weinberg, COO of Skechers USA, Inc. “With Skechers” engaging lifestyle collections, revolutionary comfort innovations and our business support, we believe the Philippines can become a key market for us in South East Asia. “