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Mapping Skechers’ Key Future Growth Drivers

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Nov. 22 2019, Updated 5:54 a.m. ET

Mapping Skechers’ expansion moves

Skechers (SKX) has been rapidly adding new points of sale in the United States and abroad. The company became the second-largest footwear company in the United States in 2015.

Between the start of 2012 and the end of 1Q16, the company added 114 net new stores in the United States and 81 in international markets.

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Marketing campaigns

Skechers’ broad product portfolio and lower priced products have appealed to a wide audience ranging from kids to baby boomers. Its marketing campaigns, which feature stars such as Demi Lovato, Meghan Trainor, Colin Montgomery, Sugar Ray Leonard, and Ringo Starr, target a wide cross-section of the population.

Skechers’ overall store comps growth came in at 10.5% in 2015 and 9.8% in 1Q16. The performances of its international stores, particularly in China, have been relatively stronger. Its international store comps came in at 17.7% in 1Q16.

The company has also reported a strong sell-through of products at full price. Both its volumes and its average selling prices have risen over the past year.

Channel growth

The above-mentioned factors enable Skechers to both widen its reach and seek new distributor agreements with other retailers.

However, while the global market for athletic footwear is big and growing, Skechers is a relative minnow compared to global giants Nike (NKE), Adidas (ADDYY), and Puma (PMMAF).

Under Armour (UA), too, has grown (IUSG) (IJH) its footwear business exponentially, spurred to a large extent by the success of its signature Curry line of basketball footwear.

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