👟 Is Skechers the next big sneaker comeback? Or a $9.4B mistake in the making?
PE firm 3G Capital announced that they will be acquiring Skechers for $9.4 Billion and taking the company private.
3G is best known for building up Ab InBev, the world’s biggest beer brand, through a series of mergers & acquisitions ranging from InBev to Anheuser-Busch to SAB Miller.
They also built up Restaurant Brands International (Burger King, Tim Hortons, Popeyes) and the merger of Kraft Heinz, which did face some challenges.
It’s part of 3G’s playbook to acquire more companies and I don’t think Skechers can grow organically without M&A. In the next few years, 3G should probably acquire a smaller, faster-growing footwear brand to merge with Skechers.
Skechers is definitely not the sexiest sneaker brand or the one most poised for growth, but there could be an opportunity to engineer growth via acquisition.
The upside is that there are a lot of potential footwear acquisition targets that may fit their criteria — like Asics, Hoka, New Balance, Crocs, or even On.
Sneakers is a very different world from beer, QSR, or even FMCG and I’m not convinced that 3G’s playbook will automatically work for sneakers.
Understanding culture, hype, marketing, storytelling, community, and authenticity are significantly more important factors in sneakers/footwear. This is a different skillset than making a beer or restaurant brand succeed.
Also — collabs are the lifeblood of sneakers. Skechers has recently started working with athletes like Joel Embiid and Harry Kane to break into different shoe categories but they have a long way to go.
If PWR House worked with Skechers/3G, we’d start by helping them map out their global strategy in becoming a more desirable brand and defining what elements of culture they want to associate with — the talent, the content, the collaborations.
The sneaker industry is in an interesting place and anytime there’s new ownership of a major brand, that means there’s an opportunity for dramatic change.
If done well, Skechers could become a wonderful growth case study. If done poorly, we could look back on this acquisition as a massive mistake.
