Business
As competitors falter, SoCal's Skechers is surging with strategy of 'try and try again'
In a crowded sneaker market roiled by the stumbles of its longtime king, Manhattan Beach-based Skechers has been climbing its way up the ranks.
While Nike, which has dominated the athletic footwear landscape for years, made headlines last month for its plummeting stock price and gloomy outlook, Skechers announced record sales in the first quarter of 2024 of $2.25 billion, a 12.5% increase over last year. Since 2019, it has increased its annual revenue by more than 50%.
In June, Bank of America upgraded its rating on Skechers’ stock to a strong buy, and this week Morgan Stanley followed suit — notable votes of confidence in the fundamentals of a company that has seen its stock price rise more than 20% over the last year. Shares closed at $65.10 on Tuesday.
Analysts and company leadership attribute the brand’s success to a strategy built around constant innovation and a diverse array of footwear products. Sam Poser, a footwear and apparel analyst at Williams Trading, said Skechers is navigating choppy waters better than its rivals.
“It’s not like the macro environment is different for Skechers than it is for Nike or New Balance or Adidas,” Poser said. “One of the reasons they’re outperforming is because they’re executing in this difficult environment.”
While Skechers offers a wide variety of footwear — from soccer cleats to work boots to summer sandals — it has still managed to find a strong company identity, Poser said.
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1. Skechers and Snoop Dogg collaborated on shoes. 2. Skechers offers a wide variety of footwear — soccer cleats, work boots, summer sandals and more. 3. Children’s shoes on display at the Skechers store in Manhattan Beach. (Christina House / Los Angeles Times)
“Skechers owns the comfort business,” Poser said. “What they’re doing is bigger than I think a lot of people appreciate.”
Skechers brought in $8 billion in sales in 2023 compared with $7.4 billion in 2022. The company has a near-term goal of reaching $10 billion in sales by 2026, said Chief Financial Officer John Vandemore.
The self-proclaimed “comfort technology company” has seen success with recent releases such as Hands Free Slip-ins and podiatrist-certified Arch Fit shoes. Its website lists 14 different footwear technologies, with names like Glide-Step and Hyper Burst.
“You have to be innovative and you have to deliver newness,” Vandemore said in an interview. “There was no analogy in the marketplace when we started Slip-ins, and it’s done exceedingly well.”
The company is scheduled to announce its second-quarter results on Thursday, with analysts estimating revenue of $2.21 billion, up 10% from the same period a year ago, and earnings of 92 cents a share, down 6.1% from a year earlier, according to Zacks Equity Research.
Not all of Skechers’ gambles have paid off, Vandemore acknowledged. Introduced in 2009, Shape-up sneakers were immensely popular until the company was sued by the Federal Trade Commission over its claims that the shoes would help customers lose weight and tone their muscles. Skechers paid $40 million to settle the class-action lawsuit in 2013.
Other Skechers models have seen longer-term success, such as the children’s line of light-up Twinkle Toes sneakers, introduced in 2008 and still widely available.
Caleigh Hopson, 7, browses shoes with her mother, Laura, at the Skechers store in Manhattan Beach.
(Christina House / Los Angeles Times)
“I think that willingness to try and try again until you succeed is noteworthy and it’s led to a significant amount of success,” Vandemore said. He praised the company’s chief executive, Robert Greenberg, for his willingness to take risks.
“One of Robert’s key talents is being able to tolerate risks and, quite frankly, not dwell upon them,” Vandemore said. “In our culture we try a lot of different things. Some of them work and some of them don’t.”
In contrast, Poser said, Nike has not been able to come up with fresh offerings for consumers in recent years.
“Nike was not innovating enough and putting a lot of non-compelling product into the marketplace,” he said.
When Nike released its tepid first-quarter earnings report in March, its chief financial officer, Matthew Friend, said the company was “taking action to build a faster, more efficient Nike and maximize the impact of our new innovation cycle.”
Along with a pipeline of new products, Vandemore said, value and affordability are among the brand’s top priorities. Several models featuring the popular Slip-in technology are available for less than $100.
“They’re delivering a quality product that has comfort and style at a reasonable price,” said Jim Duffy, a sports and lifestyle analyst at Stifel. “In an environment where the consumer is facing pressures to their discretionary spending capacity, Skechers is doing a very good job of offering value.”
In a trend brought on by COVID-19, Duffy said, more consumers of all income levels are buying and wearing athletic footwear. A nice dinner out may have required dress shoes before the global pandemic, he said, but standards have changed.
“COVID was an accelerator for casualization and that’s really expanded the wearable occasions for sneakers and comfort footwear,” Duffy said. “Skechers has done well to capitalize on that.”
Skechers’ customer base is mostly children and older adults, Duffy said, not teens and young adults. But Poser said the customer demographic varies largely across markets, both in the U.S. and internationally.
“It’s much broader than you think,” Poser said. “They have K-pop bands wearing their shoes.”
Last year, international sales accounted for 62% of the company’s global revenue. Vandemore said Skechers’ investment in growing its international footprint has provided the company an important boost in growth.
Store manager Diane Morales unboxes a pair of shoes for a customer at the Skechers store in Manhattan Beach.
(Christina House / Los Angeles Times)
At the end of March, the company had slightly more than 1,100 international stores, 565 domestic locations and more than 3,500 “distributor, licensee and franchise stores,” according to company figures. The corporate offices in Manhattan Beach house 1,280 employees.
Vandemore also said the company’s balance of wholesale and direct-to-consumer sales set it apart from other brands in the industry.
“Some of our competitors have chosen to primarily focus on their own stores or their own online sales at the expense of wholesale partners, which is not our strategy,” Vandemore said. “We embrace all avenues.”
In 2023, 44% of Skechers’ annual profits came from direct-to-consumer sales and 56% came from wholesale business.
Looking to the future, Vandemore said Skechers will stick to its core strategy while adapting to new trends and demands.
“We’ve been very successful focusing on developing and delivering great products, growing our direct-to-consumer channel and growing internationally,” he said. “That formula, we do believe, will continue to yield results.”
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
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