Skechers has bought back the minority stake of its business in India as the footwear brand plans for future expansions into one of the world’s most potent emerging markets.
On Tuesday, Skechers finalized its purchase of the remaining 49 percent of its business in India. The California-based brand bought the stake back from its once-partner in the area, Future Group, according to the Economic Times.
There are currently 223 Skechers retail stores spread out between 61 wholly-owned locations, and 162 locations operated and owned by third parties. As part of the expansion, Skechers said it is likely to build another 80 to 100 stores in 2019, of which roughly 20 will be wholly-owned by Skechers.
Skechers first entered into the market in 2012 and has since operated in the region with the assistance of third parties like the Future Group and its own wholly-owned businesses. However, with this purchase, it has decided to take the future of the brand in the region into its own hands.
“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,” David Weinberg, CEO of Skechers said in a statement.
India can be frequently found atop lists of the world’s fastest-growing economies, regularly posting high GDP growth as the country advances technologically and economically. Earlier in the month, India’s Finance Minister, Piyush Goyal, announced that the government agency expects 7.5 percent GDP growth for FY20 and last week India’s Prime Minister, Narendra Modi said he believes the nation could have the world’s largest GDP as soon as 2030.
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As companies like Google, Amazon and Walmart enter into the region, Skechers has begun to ramp up its business, too. Weinberg touted the brand’s recent efforts, and its growing sales numbers, as a big reason why the company feels so confident committing itself to India.
“The effort of our team has resulted in significant growth as illustrated in our year-over-year numbers—2018 saw double-digit increases in wholesale and retail sales and an 80 percent increase in pairs sold, reaching 2.7 million,” Weinberg continued. “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. We expect this change to be accretive to our earnings.”
Skechers president Michael Greenberg, believes the brand will have success in India using the same business model that has made Skechers one of the world’s most valuable footwear brands—maintaining a large network of retail locations that are backed by a commitment to wholesale and e-commerce.
“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,” 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.”