Skechers USA Inc. (SKX)’s push to become a legitimate sports-shoe brand now may include buying a piece of the Los Angeles Clippers.
The company, based in the Los Angeles suburb of Manhattan Beach, said today it may lead a group to buy part of the National Basketball Association team. The sneaker maker joins celebrities and investors, including Oprah Winfrey and Oracle Corp. Chief Executive Officer Larry Ellison, in showing interest in the team should Donald Sterling sell it in the wake of racist remarks that got him banned from the league.
Buying a stake would give Skechers marketing opportunities in the second-largest U.S. media market and help its years-long effort to transform from a maker of inexpensive shoes that imitate rivals’ products into a serious athletic brand. That effort got a boost last month when pitchman Meb Keflezighi won the Boston Marathon.
“Skechers cannot compete with the deeper pockets of” Oprah and others, Sam Poser, an analyst for Sterne Agee & Leach Inc. in New York, said in a note to clients. But it was a “great way to get a lot of free publicity.”
Skechers declined 4.9 percent to $39.93 at the close in New York. The shares have gained 21 percent this year.
The stock dropped on the company’s interest in the Clippers because buying a stake would likely mean taking money from its robust advertising budget, said Poser, who recommends buying the shares.
The company has rebounded from a rough patch when it made an oversized bet on toning shoes, footwear that it promised would slim women’s backsides. After an initial boost in sales, demand faded. The company eventually paid a $45 million fine for false advertising on toning products.
Skechers’s revenue rose 18 percent in 2013, ending two years of declines. Sales surged 21 percent last quarter.
To contact the editors responsible for this story: Nick Turner at email@example.com Kevin Orland, James Callan