Blog: Skechers bid for Heelys set to roll on?
Leonie Barrie | 15 August 2008
Skechers seems determined to get a piece of the wheeled action, having just made a second bid for wheeled footwear maker Heelys. Its offer of US$142.8m or $5.25 a share beats the $4.75-5.10 per share which was tabled – and rejected – at the end of May.
So why is Skechers so keen to buy its rival? Just two weeks ago Heelys swung to a second quarter loss of $0.4m, from a profit of $12.8m in the same period a year earlier, as sales tumbled 75% to $18.2m from $74.3m. And Heelys has been beset with problems, not least of which are fears that its shoes are little more than a passing fad. It has also been saddled with high levels of inventory after retailers over-ordered and the sneakers started to fall out of favour with fickle teens and tweens.
On the positive side, Heelys could help Skechers build its children’s business, and a deal would help the Heelys brand to grow internationally through Skechers’ own stores and global distribution network.
All the indicators, though, seem to suggest Heelys will reject this offer again – perhaps opening the floor for a rival bid. So it really does look as though this deal is set to roll on a while longer.
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