Retailers facing significant challenges due to U.S. President Donald Trump’s trade war are increasingly considering “take-private” offers to avoid market volatility. The recent take-private deal with sneaker-maker Skechers has highlighted a potential trend among retailers seeking stability amid erratic company valuations.
Investment bankers and M&A lawyers suggest more retailers might pursue similar deals if there’s no resolution to the ongoing trade uncertainties. The rapid changes in tariff policies have severely impacted the retail sector, leaving many companies unable to provide reliable earnings guidance.
For instance, Skechers saw its market value plummet from approximately $11.85 billion at the end of January to around $7.4 billion by April, directly correlating with the announcement of tariffs. To navigate this turbulent environment, Skechers, predominantly owned by the Greenberg family, opted to sell to investment firm 3G Capital for about $9.4 billion.
This transition to private ownership would shield the company from public scrutiny and help maintain consistent valuations. The deal represents a growing willingness among retailers to explore private sales, particularly those managed by families or individuals with majority stakes.
According to Kurt Anthony from UBS, the ongoing instability is prompting board members to consider the benefits of operating privately, where they can better manage operational and financial decisions without the pressures of quarterly reporting. Other retailers that may follow suit include Under Armour, Columbia Sportswear, and Birkenstock, all of which have significant family or single investor ownership allowing for quicker decision-making.
As the trade landscape continues to shift, it’s likely that more retailers will seek to go private to weather financial uncertainties effectively.