Skechers is bringing its business in-house.
In a bid to expand the presence of its international retail network, the footwear retailer announced that it had bought out fashion and lifestyle conglomerate Future Group from the minority share of its joint venture in India, taking its 49 percent stake to make Skechers South Asia Pvt. Ltd. a wholly owned subsidiary.
The South Asian country is considered one of Skechers’ fastest-growing and largest international markets, with 223 stores — 61 owned by the company and the remaining operated by third parties. The Manhattan Beach, Calif.-based company also plans to open an additional 80 to 100 stores this year. (About 20 of those locations will be company-owned and -operated.)
“Skechers is still a relatively young brand in this country, having been in India for less than a decade, yet in the last five years, we have seen significant growth through our joint venture,” president Michael Greenberg said in a statement. “The substantial existing retail network of over 200 stores, a strong wholesale business and a recently launched e-commerce site is a solid foundation that we can build upon. These accomplishments, as well as opportunities we see to increase the brand’s exposure and drive sales, give us great optimism and confidence for the growth of Skechers in India.”
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As part of the deal, the subsidiary will remain in its existing headquarters in Mumbai and continue to conduct business under its existing structure. When the company reported fourth-quarter and full-year results last week, it said it experienced double-digit growth in each of its international businesses — company-owned retail, distributor, subsidiary and joint venture — as well as an 80 percent increase in pairs sold to reach 2.7 million. It did not reveal financial details of the transaction.
“Few markets match the potential for growth of India, which is why we entered the market initially and why we recently decided to purchase the minority stake in our joint venture,” said chief operating officer David Weinberg. “We believe the strength of our diverse product and our marketing insight will help expand our product offering in India. As a subsidiary, we will be able to leverage our capital, product, logistics and business model to better maximize our brand exposure to the 1.3 billion consumers in this country.”
Skechers’ also said last week that its fourth-quarter sales hit $1.08 billion, pushing its total annual revenue to $4.64 billion. The company considers its international business its “most significant growth opportunity” — making up more than 50 percent of its total sales — also establishing a joint venture with its distribution partner in Mexico and improving the functionality of its e-commerce site in China.
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