Skechers recently made headlines after being acquired by 3G Capital for $63 per share — a sharp jump from its pre-announcement trading price of around $48 per share.
Media coverage was quick to connect the buyout to U.S.–China tariffs, arguing that the looming prospect of squeezed margins and crushed retail stocks pushed the company to go private.
This story, in my view, misses the real point.
In this newsletter, I’ll explore what truly drove Skechers to make a deal with 3G Capital, and what managers in mid-sized firms can learn from it.
Going Private: Investigating Reasons
The timing of the buyout did coincide with significant tariff-related market volatility. Skechers’ stock had dropped from $56 to $48 as investors reacted to Trump’s trade policies.
But most retailers are responding to tariffs by shifting production, cutting costs, and increasing prices. It doesn’t seem to me that the market is forcing anyone into selling their business, especially now that the tariffs are on hold.
I also considered whether it was about a sale-leaseback. In this financial strategy, the property of a retail firm is sold to a real estate investor who then leases it back to the company — I explain it in detail in this article about Frisch’s private equity deal. But Skechers doesn’t own their real estate, as most of their shops are located in shopping centers or malls.
As you can see, the most obvious reasons didn’t seem to explain their move. The reason Skechers went private becomes clear only after we understand how the company was structured.
A Founder’s Legacy and Its Limitations
Skechers isn’t just another shoe company. It’s the third-largest footwear company in the world, after Adidas and Nike. It’s also the second act of Robert Greenberg, the founder of LA Gear, a major 1990s brand that reached over $800 million in sales in 1990.
After being forced out of LA Gear, Greenberg launched Skechers in 1992. Known for affordable, comfortable shoes, they grew steadily, eventually reaching a $9.3 billion market cap in 2024.
The Greenbergs controlled the company through a dual-class share structure: Class A shares were public; Class B shares belonged to the family. They owned 13% of the stock, but thanks to a 10-to-1 voting power, Robert Greenberg and his family collectively controlled 60% of the voting stock.
That kind of setup works — until it doesn’t.
Robert is in his mid-80s and, alone, held over 55% of the voting power. That created a major succession issue regarding who was going to run the company in the long term, and more importantly, who would control it.
Not a Reaction to Tariffs, But to Time
I believe the real driver behind the buyout was succession, specifically the challenge of transitioning control when a single individual holds the reins of a multibillion-dollar public company and is nearing retirement.
The most obvious choice would be Robert’s son, Michael Greenberg, taking over, and the business going back to family ownership. But he is also in his 60s, which makes me suspect he might also have an interest in selling the company.
If Robert Greenberg transferred his Class B shares to his six children instead, those beneficiaries would acquire voting rights. This means that multiple individuals would be making decisions and could potentially form alliances with outside shareholders, gaining the ability to outvote the remaining members.
Alternatively, if Skechers stayed public, it might have allowed shareholders or investors to seek leadership changes during the succession process. A potential disruption to the Greenberg family’s long-term vision and continuity plans.
More Governance over the Process
Going private allowed Sketchers to manage the transition quietly, on their own terms, without interference. It also allowed them to cash out at an impressive price ($9.42 billion) while the company was still fundamentally valuable.
Had the Greenbergs initiated this process a decade ago, they could have gradually sold off shares. They could also have established a board capable of overseeing the transition and assembling a professional external management team.
This approach would have ensured the company’s continued strength while allowing the Greenbergs to maintain governance over the process. However, it’s possible they hesitated due, in part, to Robert Greenberg’s experience of being pushed out at LA Gear, an event that may have left him wary of outside involvement.
And there is no denying that going private can make it easier to implement a new strategy. Take Dell’s example. While they were still a public company, investors kept pressuring them to boost margins through efficiency improvements. They didn’t see value in Dell’s plan to transition from selling home computers to focusing on enterprise solutions.
Once Silverlake and Michael Dell took Dell private, they could shift the focus by leveraging business sales and strategic investments (VMWare and EMC). As a result, Michael Dell sold the company for a market value of $35B in 2018 after buying it back for $24B in 2012, meaning, $11B profit in only four years.
Why 3G Capital
The next question to investigate was why the Greenbergs chose to sell Skechers to 3G Capital specifically.
3G Capital is known for taking long-term bets on consumer brands like Heinz, Burger King, and Popeyes. They have both the expertise and financial strength to manage the kind of operational and governance transformation Skechers needed.
Just as importantly, the Greenbergs appear to trust them enough to negotiate a deal with no competitive bids. That’s rare in retail. And, above all, they were willing to pay a premium for reasons we can easily tell:
- Skechers’ stock had fallen, but they historically traded above $60–$70 per share, within the $62 price per share paid by 3G Capital.
- Its price-to-earnings ratio (how much the company is valued compared with its earnings or management’s trading) was unusually low (around 11X). But competitors like Hoka were sitting around 19X–20X, indicating that 3G Capital might be expecting a significant return on investment in the future.
- With most of Skechers’ growth coming from international markets, where U.S. tariffs have less impact, investors may see the company as a compelling opportunity.
What Managers Should Expect During a Transition
Now that we have established why Skechers went private and didn’t go back to family ownership, let me explain why I am telling you all this.
First, because I’d like to encourage you to reflect beyond the headlines you read, especially if they are about the industry you work for. They might not be presenting the entire story. Or they might be telling you the wrong story.
Second, because succession and buyout aren’t just a board-level concern or something that happens only to large companies. It’s everyone’s concern and can happen to any company. So you should be aware of how they happen and prepare for them.
During my time working for Luxottica, the founder, Leonardo Del Vecchio, returned from retirement, fired his professional managers, and forced a new succession plan. Without much warning, we had to deal with several CEO changes, relocations, staff reductions, and a lot of chaos.
Multiple seven-figure projects would show up one week on my desk just to disappear the next. The scenario stabilized after it merged with Essilor, but the process was harsh and troublesome, mostly because the succession planning was left to the last possible minute.
Whether you’re in finance, operations, HR, or sales, here’s what to expect and how to respond if your company is going through these types of transitions:
1. Going private often signals a pivot in long-term strategy. Managers need to quickly assess how their team’s role may change under the new direction. If you’re in the supply chain, for instance, you want to start thinking about how your supply chain shifts: if you’ll be handling fewer, but much higher value products.
2. Private equity firms like 3G Capital often restructure how performance is tracked. KPIs may change from public-market-friendly metrics (quarterly growth) to long-term value drivers (margin expansion, efficiency, international scale).
3. Leadership changes can spark team management challenges driven by confusion, fear, or misalignment. Managers must anchor their teams by distinguishing real priorities from noise, reinforcing purpose, and providing clarity — even when the top-line strategy is constantly evolving.
4. Post-buyout, new decision-makers appear at all levels. Managers who build early relationships with new leaders and demonstrate how their teams can drive results will position themselves for success.
Transitions are inevitable. The question is whether you’re prepared to help your team and your company emerge stronger on the other side.
What You Can Do in Advance
Managers at mid-size companies can — and should — prepare for leadership transitions in ways that protect the business, their teams, and themselves. Because if the company hits a crisis, they are the ones who are going to have to manage the changing landscape. And even if you are unsure of what is happening, there are still things you can do:
Watch for the Signals
A board full of long-time loyalists to a single founder. A management team that hasn’t evolved. An ageing CEO or chair with no clear second-in-command. These are early signs of an impending succession crisis. In healthy public companies, the board and management should be independent and not controlled by a single individual or family.
Build Team Resilience
Managers should document processes, cross-train talent, and empower team leaders to handle uncertainty. This reduces disruption and retains institutional knowledge when leadership shifts happen.
Communicate Calmly
Work on your communication skills. Even without clear answers, being a calm, confident communicator helps prevent panic and rumor. Transparency, within the limits of what’s known, builds trust.
Final Thoughts: Change as an Opportunity
The Skechers buyout is a window into how companies deal with succession, control, and long-term strategy. For managers, especially in mid-size firms, it offers important reminders:
- Succession delays have costs. Even successful companies need a plan to pass leadership without imploding.
- Public-to-private moves change more than ownership. They reshape how companies think, report, and execute.
- Managers have power. In uncertain times, they are the bridge between strategy and execution, between leadership and teams.
Ownership transitions can be chaotic, but they also create opportunities.
Managers who adapt, show initiative, and align with evolving strategies can reposition themselves and their teams for new investment or expanded roles.
Be proactive. If your team can deliver value in the new world, make that known. This might be the best moment to advocate for resources, innovation, or rethinking outdated workflows.
If you’re a manager in a company with aging leadership and no clear plan, pay attention. The headlines might say “tariffs”. But underneath, it’s probably about something deeper, something you might want to be ready for.