Skechers: How Can We Get Into The 5 Billion Dollar Club?

"How did Skechers get angry?"

It has become the third fashion mystery of Crocs's cave shoes and UGG snow boots.

In the face of Nike's challenge to competitors such as Adidas, Puma and Under Armour, the fourth quarter and the year's 2018 eye-catching results released by the US sports brand Skechers once again attracted the attention of the industry.

In the fourth quarter ended December 31, 2018, Skechers sales surged 11.4% to 1 billion 80 million US dollars compared to the same period last year. In 2018, Skechers sales rose 11.5% to 4 billion 640 million US dollars, a record high, 47.9% gross profit margin, and net profit increased 7.9% to 301 million US dollars over the same period.

During the reporting period, Skechers's international business rose 19.2%, while the same store sales increased by 16.7%.

The US business grew by 3.5% and the same store sales increased by 6.7%.

Among them, the international wholesale business grew by 18.8%, the self operated international retail business grew by 12%, and the wholesale business in the United States increased by 0.8%.

For the 2019 fiscal year, Skechers is expected to set a new record in the first quarter, with sales ranging from $1 billion 275 million to $1 billion 300 million, which means that the brand's entry to the $5 billion club will be unsuspense.

Skechers chief executive Robert Greenberg said in the earnings report that the record breaking performance in 2018 was mainly due to the group's optimization of the global market and distribution channels, and the classic shoe shoes of GOWalk, and the classic DLites shoes that were re engraved.

According to the 2018 SportsScan year-end report, Skechers has taken the lead in life and leisure apparel footwear brands in the US market.

At the same time, Skechers is also accelerating the layout of offline and online sales channels for China and India. Overseas market is becoming bigger and bigger. By the end of 2018, Skechers has nearly 3000 global self retailing stores and third party stores.

Skechers chief operating officer David Weinberg revealed in a conference call after the earnings report that in 2018, the number of shoes sold by brand distribution centers to South America, North America, Japan and Europe also reached a new record, accounting for 54% of the total.

In order to better grasp the international market, Skechers has pformed India's joint venture into a wholly owned subsidiary, and has established a joint venture with its distribution partners in Mexico.

Skechers was born in 90s, and was founded in 1992 in California, USA. Its main products include men's, ladies' boots, sandals, casual shoes and sports shoes.

Thanks to the concept of comfort and supremacy pursued by Skechers for many years, the brand has become the second largest footwear brand in the United States after Nike, and has won the title of "best brand of the year" for three consecutive years.

The word "Skechers" comes from slang in southern California. It means "sitting young people", representing young people who pursue fashion and personality.

One year after its establishment, Skechers quickly launched the global distributor business strategy, and set up an international division in Australia, New Zealand and Singapore with distributors to formally internationalize.

In 1999, Skechers was listed on the New York stock exchange with the stock code of SKX.

1 years later, Skechers quickly expanded the international map to the UK, Germany, France and Japan markets, and invited Hollywood superstar Rob Lowe and Matt Dillon as spokesmen for the global image to further enhance brand awareness and influence in the world.

Because of the few sports shoes that can be beautiful and comfortable in the market, Skechers's reasonable prices and extremely comfortable products meet the needs of most consumers. The brand has been named the top 100 enterprise in the United States for two consecutive years by the Time, and has been named "the most practical footwear product" by Forbes magazine.

By the end of 2001, the Skechers sales in less than 10 years had recorded nearly $964 million in almost 1 billion dollars.

In 2002, Skechers entered the most popular European tourist destinations in Italy, Spain, Portugal, Belgium and Switzerland, and built a warehouse of 240 thousand square feet in the Belgian capital to meet the needs of the whole European market.

Meanwhile, Hollywood stars Rick Fox and Robert Downey Jr. become spokesmen for brand men's series.

In 2008, Skechers opened a new headquarters in Manhattan beach, covering an area of 150 thousand square feet. It has become the most popular brand of non functional footwear for young consumers in the research of footwear news and NPD group.

In 2009, Skechers started a new round of overseas expansion, set up a branch in Chile, worked with India distributors to develop India market, and further developed Mexico business with another shoe distributor Grupo Charly, and opened the largest flagship store in Shanghai.

In order to satisfy young consumers' pursuit of individuality, Skechers has also developed different product lines, such as high-end men's shoes Mark Nason, which are integrated with rock and roll concept, and Shape-ups series of main body shaping products.

In January 2010, Skechers was named "one of the most popular brands in America" by Advertising Age magazine.

In November of the same year, Skechers signed with American reality star Kim Kardashian and her mother Kris Jenner to shoot "Shape-ups" ads and broadcast during the midfield of the NFL Super Bowl in the United States, becoming the first American sports brand to cooperate with reality show stars, causing widespread concern.

With the rise of running sports, Skechers launched the GOrun series intelligent running shoes in the US market in November 2011. In 2012, it was named "the most innovative running shoes product" in 2012. The American runner MEB KEFLEZIGHI wore the series of running shoes in the New York marathon to get the best personal results.

The comfort of products has laid a solid foundation for the popularity of Skechers, but it can not be separated from the driving force of market trend.

In 2014, the fashion circle began to start a athleisure movement and leisure trend, which means people wear sportswear except for fitness facilities. The Wall Street journal data show that the athleisure market was $35 billion in that year, and it is expected to grow by 40% by 2020.

At the same time, formal dress and street style have spread throughout the society in recent years.

According to the British Independent newspaper, after investigating two thousand employees, First Direct found that only 1/10 of employees said they would wear formal clothes at work.

70% of the respondents said they would feel more comfortable in casual clothes, and 43% of the respondents thought that formal clothes were no longer necessary for work. Instead, wearing formal clothes in the office would be regarded as incompatible with the crowd.

Also in 2014, the Korean drama "you from the stars" was broadcast in the mainland of China. In the play, a pair of Skechers D 'Lites shoes worn by the male protagonist quickly attracted the audience's attention.

Because of its simple color matching, this shoe is very versatile and deeply loved by Korean stylists.

In addition, DLites has a stealth design of 4cm. When consumers wear it, they can stretch the leg line. The ultra light EVA midsole shock relieves the foot pressure while ensuring the comfort of consumers.

After the Korean women's group Sistar became a brand endorsement in the Asia Pacific region, the shoes became instant explosions.

Fashion headline, according to Baidu index, the search for Skechers panda shoes began to soar in the second half of 2014, which was 4 times the beginning of the year.

In 2016, Skechers decided to renew its endorsement contract with Sistar in an attempt to lift the wave of "panda shoe" more vigorously.

For a time, almost every young man on the streets of Korea had stepped on a pair of "panda shoes". Korean stars and dancers also wore Skechers shoes.

With the strong appeal of street celebrities and celebrities, the comfort oriented Skechers has become a new topic in the fashion circle.

Under the "Korean wave", Skechers successfully surpassed Adidas in 2016 and became the second largest sport shoe brand in the United States.

It is reported that Skechers's design headquarters in California will launch more than 3000 shoes each year, exceeding ten thousand SKU.

In addition to the impact of market trends, Skechers's performance in recent years has been highly innovative and cannot be separated from the strategic layout of the brand in the Chinese market.

Robert Greenberg pointed out in its earnings report that China has become the most important engine of growth for Skechers.

Skechers officially entered the Chinese market in 2007, and has been working with Lutai enterprises for more than 10 years. After getting rid of the early positioning errors and location problems, Skechers China has entered a rapid growth since 2014, and now contributes nearly 1/4 of the global sales volume.

Although the explosion of "panda shoes" made Skechers win the attention of young Chinese consumers in a short time, Chen Weili, chief executive of Skechers, realized that to maintain long-term stable growth, it is unrealistic to rely on bursting strategy.

In order to extend the bonus period of "panda shoes", Chen Weili has publicly stated that the younger generation should be the main audience target. Under the attack of Nike and Adidas, the differentiated market between Anta and Lining has announced that Chinese stars Li Yifeng, Tang Yan and Wu Chun are brand spokesmen in the Asia Pacific region, aiming to promote the brand younger through hip-hop and entertainment stars.

Skechers also ploughed the middle-aged and elderly market through its comfortable and practical Go Walk walking shoes series.

In terms of consumer segmentation, according to the relevant data, Skechers China's sales account for 65% of women's sales, while male accounts for only 35%.

On the basis of Skechers Sport, Skechers Kids and other traditional product lines, in recent years, Skechers has specially set up sports functional departments mainly focusing on Skechers GO Run and Skechers GO sports shoes, and launched a series of products for the millennial generation.

At present, DLites and GO Walk account for about 25% and 30% of China's sales respectively.

In addition, Skechers has more than 20 distributors in China as the main mode of operation, and the larger ones are Baosheng, AOKANG and BELLE, which partly help Skechers share some risks.

With targeted products and marketing strategies, 90% of Skechers's stores in China are profitable.

In 2018, Skechers accelerated the penetration of the southwest region represented by Chengdu, and opened the world's first super store in Northeast Shenyang, the super shop with an area of nearly 3000 square meters, and invited the star Huang Zitao, the famous post-90 star, to become the brand spokesperson of the Asia Pacific region. Under the impetus of various measures, the brand's income in the Chinese market last year was also high, sales rose by 36% to 14 billion 100 million yuan, and sold over 19 million pairs of shoes.

Chen Weili said abroad that in the next two to three years, the brand plans to open 300 super stores in China, continue to sink to the three or four tier cities, and get through with the electronic business platform, so as to integrate online and offline, and provide more convenient services for consumers.

He also stressed that "upgrading" after 2019 will become the strategic core of Skechers in the Chinese market, aiming to gain greater market opportunities by constantly upgrading brand and commodity strength as well as internal organizational pformation.

In addition, China's logistics center invested by 1 billion yuan for Skechers can be put into use by the end of 2019. In the five or six tier cities, Chen Weili said in an interview that relying on electricity providers could make up for the lack of coverage of traditional stores in such cities.

He predicts that by 2020, the proportion of brand sales in the Chinese market will rise from 25% to 50%.

According to the "2019 outdoor sports trend analysis" released by the first financial business data center combined with Tmall sports outdoor, the outdoor sports industry is entering the growth stage, the scale of the industry will continue to expand, the growth rate in 2019 will reach two digits, and will exceed 20% in 2020.

Under the positive market environment and trend, Skechers is expected to continue to lead the Chinese market.

It is noteworthy that the strong growth performance of Skechers seems to have attracted the attention of Vans parent company and the outdoor sports apparel giant Wei Fu group. According to foreign media quoted sources, the group has bought a sports shoe brand Skechers at a price of about $40 a share, and the two sides have already started negotiations, but some agreements have not reached a consensus and have reached a deadlock.

So far, neither the group nor Skechers has responded to the news.

In the past three months, Skechers's stock price has increased by 45%, and its market value is about 5 billion dollars.