Skechers is Set for a Year of Growth and Change, Including Board Shakeups and a New Focus on the Philippines

2021 was a landmark year for Skechers U.S.A.

Despite a global pandemic, supply chain slowdowns, and record-high inflation, the fast-growing footwear brand managed to keep business steady, reporting consistent results quarter after quarter.

“We remain confident that as supply chain constraints ease, Skechers’ will be well positioned to meet the tremendous consumer demand for our products,” said Skechers CFO John Vandemore in a release announcing the company’s Q3 results.

Throughout the year, Skechers’ wholesale business has also directly benefitted from a larger industry trend to turn away from retail partnerships in favor of a robust direct-to-consumer model. As Nike, Crocs, and other major brands exit wholesale partnerships, Skechers is picking up wins in these retail channels.

Skechers’ 2021 growth is fueling momentum for big changes in 2022.

Just this month, four board members resigned from their positions. Skechers also appointed Zulema Garcia, SVP of internal audit at Herbalife Nutrition, to the board.

Executive moves aside, investors are urging Skechers to make changes to drive higher value across the company. Tremblant Capital, which owns 5.1% of the brand, wrote a letter to the board on Dec. 1, which asked Skechers to eliminate management’s voting majority, buy back more stock, and improve relations with investors by paying a dividend, hosting an investor day, and hiring someone to lead investor relations.

“Skechers has grown revenue faster than Nike, Adidas, Puma, Under Armour, Crocs and any other relevant peer,” read the letter, which was included in a regulatory filing. “Despite these impressive facts, Skechers continues to trade at less than half of the earnings multiples of these peers.”

Skechers told FN it had received the letter and is in “the process of reviewing and discussing it internally and with the Skechers board.”

The company is already pursuing profit-driving changes across other business sectors and is reportedly considering launching a Hong Kong IPO for its Asia business, which could raise nearly $1.5 billion. The move would build on the company’s particularly strong growth in China, where sales in Q3 grew 10% year over year and 36% compared to Q3 of 2019. In 2020, Skechers’ China sales were $924.5 million, or 20% of the $4.6 billion sales total for the year, according to an annual report.

In an effort to win the growing Chinese footwear market, Skechers launched a joint venture with Luen Thai Enterprises in 2007 to expand sales and distribution in China under the banner Skechers China. According to Bloomberg, recent success in China might push Skechers to consider buying out Luen Thai and launching an IPO for the region.

Just last week, Skechers announced a plan to move its operations in the Philippines from a third-party distributor, Trendworks International, to Skechers USA Philippines, Inc.

According to the country manager for Skechers USA Philippines, Suzette Pasustento, Skechers is working on “reestablishing the brand in the market” by launching new offices, a distribution center, and the first new store this month.

Pasustento said the company plans to open another 10 to 12 concept stores in 2022 and launch new categories and marketing campaigns.

“The Philippines has immense potential for Skechers, and with our dedicated team focused on growth and delivering the integrated capabilities of Skechers, we believe this step accelerates that potential,” said David Weinberg, chief operating officer of Skechers USA, Inc. “With Skechers’ appealing lifestyle collections, groundbreaking comfort innovations and our corporate support, we believe the Philippines can become a key market for us in Southeast Asia.”

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