Skechers made a splash when it signed Philadelphia 76ers star Joel Embiid last year to a multiyear endorsement deal that made him the face of its burgeoning basketball division. A year later, the footwear company has been sold for roughly double the value of his team.
Skechers (NYSE: SKX) announced on Monday that it has been acquired by investment firm 3G Capital in a $9.4 billion transaction. The company’s shares were up nearly 25% when the market closed. 3G Capital, which is paying $63/share for all outstanding shares, is leading one of the retail industry’s largest privatization deals in years. It signals a vote of confidence in the long-term profitability of the footwear sector despite ongoing tariff concerns raised by the Donald Trump administration.
“We live in a sneaker world today,” BCE Consulting senior advisor Matt Powell said in a phone interview. “If there’s going to be any casualties in this short-term tariff problem, it’s going to be small brands like mom-and-pops that you don’t even know exist. The big brands will get bigger, and a lot of smaller brands will go away.”
The valuation of the Skechers takeover is comparable to the NBA’s most valuable franchise, the Golden State Warriors. The Warriors, who are aiming for their eighth NBA title in team history this postseason, were valued at $9.1 billion in Sportico’slatest NBA valuations. 3G Capital’s $9.4 billion acquisition also extends past all NFL teams not named the Dallas Cowboys ($10.3 billion).
The 3G Capital portfolio includes prominent sponsors of pro sports teams and leagues such as beer giant Anheuser-Busch; Tim Hortons, a longtime Toronto Raptors sponsor; and Kraft Heinz, the former stadium naming rights holder for the Pittsburgh Steelers.
While the recent deal with 3G has a higher valuation than most pro sports teams, Wall Street regularly values clubs at a steep discount compared to the private valuations done by media outlets. Madison Square Garden Sports Corp.(NYSE: MSGS), which owns the New York Knicks and New York Rangers, has an enterprise value of $4.5 billion, far lower than the combined value of the franchises.
Other sports apparel giants remain more valuable than any pro sports team. Nike currently has a market cap of $85 billion, while Adidas has a cap of $41 billion despite both companies facing challenges from increased tariffs. Skechers, an often-overlooked footwear company with a market cap of $9 billion, has turned to its basketball division in the last couple years to boost awareness and drive sales across its performance category.
Atlanta Hawks guard Terance Mann and Minnesota Timberwolves forward Julius Randle were the first basketball players to sign with the brand in 2023. Skechers has since added a slew of new talent to its roster, including Los Angeles Sparks star Rickea Jackson and Washington Mystics rookie Kiki Iriafen. Embiid, though, is the most notable star on the roster, and the 2022-23 NBA MVP will continue to be the face of the sneaker brand as the new private equity parent company takes over.
It’s unclear if 3G Capital will scale back or make the performance side of the business more competitive. For example, the category got a boost with Bayern Munich star Harry Kane winning Bundesliga in Skechers boots over the weekend. Powell believes that not only will prices be raised but also that the influence of chairman Robert Greenberg and president Michael Greenberg will slowly decline despite them remaining in their roles.
“There will be changes,” he said. “Anytime private equity gets involved, there’s changes coming and quickly.”
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Skechers made a splash when it signed Philadelphia 76ers star Joel Embiid last year to a multiyear endorsement deal that made him the face of its burgeoning basketball division. A year later, the footwear company has been sold for roughly double the value of his team.
Skechers (NYSE: SKX) announced on Monday that it has been acquired by investment firm 3G Capital in a $9.4 billion transaction. The company’s shares were up nearly 25% when the market closed. 3G Capital, which is paying $63/share for all outstanding shares, is leading one of the retail industry’s largest privatization deals in years. It signals a vote of confidence in the long-term profitability of the footwear sector despite ongoing tariff concerns raised by the Donald Trump administration.
“We live in a sneaker world today,” BCE Consulting senior advisor Matt Powell said in a phone interview. “If there’s going to be any casualties in this short-term tariff problem, it’s going to be small brands like mom-and-pops that you don’t even know exist. The big brands will get bigger, and a lot of smaller brands will go away.”
The valuation of the Skechers takeover is comparable to the NBA’s most valuable franchise, the Golden State Warriors. The Warriors, who are aiming for their eighth NBA title in team history this postseason, were valued at $9.1 billion in Sportico’s latest NBA valuations. 3G Capital’s $9.4 billion acquisition also extends past all NFL teams not named the Dallas Cowboys ($10.3 billion).
The 3G Capital portfolio includes prominent sponsors of pro sports teams and leagues such as beer giant Anheuser-Busch; Tim Hortons, a longtime Toronto Raptors sponsor; and Kraft Heinz, the former stadium naming rights holder for the Pittsburgh Steelers.
While the recent deal with 3G has a higher valuation than most pro sports teams, Wall Street regularly values clubs at a steep discount compared to the private valuations done by media outlets. Madison Square Garden Sports Corp.(NYSE: MSGS), which owns the New York Knicks and New York Rangers, has an enterprise value of $4.5 billion, far lower than the combined value of the franchises.
Other sports apparel giants remain more valuable than any pro sports team. Nike currently has a market cap of $85 billion, while Adidas has a cap of $41 billion despite both companies facing challenges from increased tariffs. Skechers, an often-overlooked footwear company with a market cap of $9 billion, has turned to its basketball division in the last couple years to boost awareness and drive sales across its performance category.
Atlanta Hawks guard Terance Mann and Minnesota Timberwolves forward Julius Randle were the first basketball players to sign with the brand in 2023. Skechers has since added a slew of new talent to its roster, including Los Angeles Sparks star Rickea Jackson and Washington Mystics rookie Kiki Iriafen. Embiid, though, is the most notable star on the roster, and the 2022-23 NBA MVP will continue to be the face of the sneaker brand as the new private equity parent company takes over.
It’s unclear if 3G Capital will scale back or make the performance side of the business more competitive. For example, the category got a boost with Bayern Munich star Harry Kane winning Bundesliga in Skechers boots over the weekend. Powell believes that not only will prices be raised but also that the influence of chairman Robert Greenberg and president Michael Greenberg will slowly decline despite them remaining in their roles.
“There will be changes,” he said. “Anytime private equity gets involved, there’s changes coming and quickly.”
