Retailers still reeling from the effects of the tariff measures introduced under the previous administration are increasingly fielding offers to go private, as volatile market conditions and unpredictable trade policy continue to weigh on valuations. In recent months, the number of negotiations between retail boards and private investors has spiked, fueled by frustration over abrupt cost shocks, shrinking profit margins and the inability to provide reliable financial guidance in a trade environment that remains unsettled.
Many of the companies most affected by tariffs announced in 2018 and 2019 continue to feel the repercussions, even as new tariff actions in early 2025 have exacerbated pressure on supply chains. For businesses that saw their share prices slide as import taxes on goods from Asia and Europe jacked up sourcing costs, the option of going private has become increasingly appealing. Executives and board members frustrated by sudden tariff announcements note that shaving the burden of quarterly earnings scrutiny off their shoulders and regaining control over long-term operational decisions in a private setting can provide a respite from a market that has punished exposed retailers mercilessly.
Skechers’ recent agreement to sell itself to a private investor group exemplifies this wider trend. After the athletic footwear maker’s valuation plunged from roughly $11.9 billion in late January to about $7.4 billion by April—following a fresh round of import levies—its leadership pulled 2025 guidance and entered into exclusive talks with a major private investment firm. That deal, struck at an equity value of approximately $9.4 billion, allows Skechers to shed the ups and downs of public-market valuation swings and reorganize its China- and Vietnam-reliant supply base out of the limelight. From a boardroom perspective, it has become difficult to reassure shareholders when each new headline about escalating trade friction can send stock prices tumbling overnight.
Industry advisors say Skechers is far from an outlier. In interviews with investment bankers and merger-and-acquisition lawyers, dealmakers estimated that several other retail chains are in preliminary discussions with private-equity groups or strategic acquirers. The primary motivation: the need to insulate corporate plans from sudden tariff hikes and retaliatory measures that muddy the outlook for consumer prices and margins. The global tariff landscape shifted again in early April 2025, when the administration’s comprehensive trade policy raised the average effective U.S. import tax rate to levels not seen since 1909. By pushing up costs across categories, from apparel to home goods, that policy inflicted fresh blows on retailers still grappling with supply-chain disruptions left over from the pandemic.
Take-private discussions are particularly active among companies whose ownership structures facilitate swift transactions. Under Armour, for instance, where the founder still holds a commanding voting stake, is said to be weighing offers from multiple suitors. Columbia Sportswear, led by a founding family with a controlling interest, and Birkenstock, where a private-equity partner already holds a majority stake, also feature prominently on dealmakers’ lists of likely candidates. In each case, having a dominant shareholder or concentrated voting control simplifies the path to a buyout, minimizing the need to secure broad support from a diverse base of public shareholders—a process that can be both time-consuming and uncertain.
Beyond ownership structure, retail chains that withdrew their forward-looking guidance amid tariff uncertainty are especially prime for private bids. When a company cannot predict the cost of goods or set an accurate margin forecast—because the percentage of a product’s value paid in duties can change with little warning—it struggles to command a stable stock price. In 2025, tariffs on electronics imports from Asia and minimum baseline duties on China-origin goods both lifted consumer prices by more than 2 percent on average, according to recent economic analyses. That translated directly into compressed gross margins for retailers who had no choice but to shoulder much of the added cost or to risk losing customers if they passed it on in full.
Discount and off-price chains have not been immune. As one broker noted, investors are watching whether big-box discounters will need to recalculate their low-price strategies if the cost of imported apparel and accessories rises yet again. Some discount operators may be more resilient—having built leaner, more diversified sourcing arrangements—but others are already under pressure as import taxes eat into already-thin margins. In that environment, going private can allow executives to retool procurement strategies—such as pivoting more rapidly to nearshore suppliers or sourcing in-country—without the scrutiny of quarterly earnings calls, where analysts often demand precise forecasts that simply cannot keep pace with a shifting tariff regime.
Retail CEOs say that beyond protection from market gyrations, the freedom to make nimble capital-allocation decisions in private often outweighs the benefits of staying public, especially when valuation multiples have contracted. One board member from a mid-sized apparel chain commented that, after peeling back layers of cost increases due to successive tariff announcements, the executive team no longer felt comfortable committing to growth investments under the glare of Wall Street analysts. That company has since entered into exclusive talks with a private-equity group that is prepared to fund a multi-year restructuring plan—one that a public shareholder base might view as too long-term or uncertain to support.
On the flip side, private-equity firms themselves are under pressure to deploy capital selectively, mindful of the same trade-policy uncertainties that plague public markets. Historically, deal flow among retail targets has been robust, but the resurgence of higher import duties has forced many bidders to re-evaluate potential returns. Some firms argue that buying out a weakened public retailer at a lower valuation could ultimately yield stronger returns if they can realign supply chains, compress overhead and ride out any further tariff skirmishes. That view has gained traction as long-hold investors—those willing to own a business for more than a decade—seek out targets that can be enhanced operationally behind closed doors.
Another factor fueling acquisition interest: the broader macroeconomic backdrop. Consumer spending in early 2025 shows signs of softening as household budgets are stretched by higher everyday costs. In the first quarter, some leading department-store operators reported comparable-store sales declines of 3–4 percent, with executives directly citing tariff-related cost pressures as a key driver. When topline growth slows at the same time as the cost of goods sold rises, profit margins erode—making retailers look increasingly vulnerable to takeover offers promising immediate cash infusions for shareholders.
Moreover, retailers whose balance sheets show elevated debt levels have found it more challenging to refinance or access cheaper capital. Banks and bond investors, uncertain about future margin headroom in a high-tariff environment, often demand higher interest rates or covenant protections that restrict operational flexibility. By contrast, in a take-private scenario, a well-capitalized sponsor can refinance debt under less aggressive terms, extend maturities, or inject additional liquidity to fund supply-chain retooling, digital modernization or new logistics capabilities.
In some cases, even household names are quietly exploring options. One consumer-products retailer with a national footprint recently hired financial advisers to canvass potential interest from private groups. Though that company has managed to offset a significant portion of tariff costs through supplier rebates and hedging contracts, it still sees upside in moving away from the public markets—where a single tweet about potential additional duties can erase billions in shareholder value. Industry insiders say that, while no formal agreement has been announced, negotiations remain active and could conclude later in 2025 if both sides can align on a valuation that reflects the remaining tariff risk.
Not all retailers are candidates, however. Those that have reshaped sourcing to reduce exposure to offshore manufacturing, or that command pricing power in niche segments, have fared better under the shifting trade landscape. Major home-improvement chains, for instance, have been able to largely absorb new import costs because they source roughly half of their inventory domestically and maintain deep category expertise that consumers trust. As a result, these companies have retained stable public valuations and shown little interest in private bids.
Even so, the gap between retailers likely to stay public and those being considered for take-private deals appears to be widening. Executives at publicly traded retailers say that until there is a credible path to sustained stability in trade policy—whether through tariff rollbacks, broader trade pacts or clearer exemptions—they will struggle to deliver consistent guidance. Analysts project that if average effective U.S. tariffs remain at 22 percent or higher through mid-2026, more mid-cap apparel and specialty retailers could face both margin and valuation challenges severe enough to trigger buyout overtures. Some arbitrage could emerge for private-equity buyers that have the patience to carry investments for seven to ten years, even as traditional leveraged-buyout funds typically look to exit within three to five years.
For boards weighing take-private bids, the calculus often hinges on how much longer tariff volatility will linger. If negotiations between Washington and trading partners deliver meaningful relief, public valuations could recover—and staying public would likely become the preferred route once again. But if trade negotiations stall or new geopolitical tensions prompt fresh levies, the rationale for seeking shelter in private markets grows stronger. In the meantime, take-private firms are positioning themselves to move quickly whenever a board signals an openness to explore options, gathering diligence on supply chains, cost structures and digital commerce capabilities to act when the moment arrives.
Ultimately, the shift toward private ownership among tariff-stricken retailers highlights a broader dynamic in which policy uncertainty has real operational and financial consequences. For shareholders, a take-private deal often means a guaranteed premium over prevailing share prices—an attractive proposition when valuations have been battered by external shocks. For executives, operating away from the glare of public markets can facilitate long-term investments in omnichannel strategies, inventory automation and localized manufacturing—initiatives that might otherwise be sidelined if quarterly results become the sole barometer of success.
As of mid-2025, deal trackers show a clear uptick in announced take-private transactions within the retail sector, compared with the same period last year. With no sign yet of sustained tariff relief, both mid-sized and larger retailers are likely to feel continued pressure to consider a private-home approach. Whether through family backing, private-equity underwriting or combinations of strategic backers, the path to private ownership is poised to remain an increasingly well-trodden route for retailers that want to insulate themselves from the unpredictable swings of trade policy.
In the coming months, observers expect that more boards will quietly invite proposals for buyouts, if only to ensure they are not blindsided by a competing bid or sudden market decline. For now, the conflation of tariff-induced cost pressures, uneven consumer demand and lingering global supply-chain disruptions has created an environment in which taking a company private looks more like a strategic necessity than a luxury. And until a more predictable trade framework takes hold, retailers impacted by tariffs will continue to find the prospect of a private retreat an increasingly appealing way to chart a steadier course.
(Source:www.globalbankingandfinance.com)
Many of the companies most affected by tariffs announced in 2018 and 2019 continue to feel the repercussions, even as new tariff actions in early 2025 have exacerbated pressure on supply chains. For businesses that saw their share prices slide as import taxes on goods from Asia and Europe jacked up sourcing costs, the option of going private has become increasingly appealing. Executives and board members frustrated by sudden tariff announcements note that shaving the burden of quarterly earnings scrutiny off their shoulders and regaining control over long-term operational decisions in a private setting can provide a respite from a market that has punished exposed retailers mercilessly.
Skechers’ recent agreement to sell itself to a private investor group exemplifies this wider trend. After the athletic footwear maker’s valuation plunged from roughly $11.9 billion in late January to about $7.4 billion by April—following a fresh round of import levies—its leadership pulled 2025 guidance and entered into exclusive talks with a major private investment firm. That deal, struck at an equity value of approximately $9.4 billion, allows Skechers to shed the ups and downs of public-market valuation swings and reorganize its China- and Vietnam-reliant supply base out of the limelight. From a boardroom perspective, it has become difficult to reassure shareholders when each new headline about escalating trade friction can send stock prices tumbling overnight.
Industry advisors say Skechers is far from an outlier. In interviews with investment bankers and merger-and-acquisition lawyers, dealmakers estimated that several other retail chains are in preliminary discussions with private-equity groups or strategic acquirers. The primary motivation: the need to insulate corporate plans from sudden tariff hikes and retaliatory measures that muddy the outlook for consumer prices and margins. The global tariff landscape shifted again in early April 2025, when the administration’s comprehensive trade policy raised the average effective U.S. import tax rate to levels not seen since 1909. By pushing up costs across categories, from apparel to home goods, that policy inflicted fresh blows on retailers still grappling with supply-chain disruptions left over from the pandemic.
Take-private discussions are particularly active among companies whose ownership structures facilitate swift transactions. Under Armour, for instance, where the founder still holds a commanding voting stake, is said to be weighing offers from multiple suitors. Columbia Sportswear, led by a founding family with a controlling interest, and Birkenstock, where a private-equity partner already holds a majority stake, also feature prominently on dealmakers’ lists of likely candidates. In each case, having a dominant shareholder or concentrated voting control simplifies the path to a buyout, minimizing the need to secure broad support from a diverse base of public shareholders—a process that can be both time-consuming and uncertain.
Beyond ownership structure, retail chains that withdrew their forward-looking guidance amid tariff uncertainty are especially prime for private bids. When a company cannot predict the cost of goods or set an accurate margin forecast—because the percentage of a product’s value paid in duties can change with little warning—it struggles to command a stable stock price. In 2025, tariffs on electronics imports from Asia and minimum baseline duties on China-origin goods both lifted consumer prices by more than 2 percent on average, according to recent economic analyses. That translated directly into compressed gross margins for retailers who had no choice but to shoulder much of the added cost or to risk losing customers if they passed it on in full.
Discount and off-price chains have not been immune. As one broker noted, investors are watching whether big-box discounters will need to recalculate their low-price strategies if the cost of imported apparel and accessories rises yet again. Some discount operators may be more resilient—having built leaner, more diversified sourcing arrangements—but others are already under pressure as import taxes eat into already-thin margins. In that environment, going private can allow executives to retool procurement strategies—such as pivoting more rapidly to nearshore suppliers or sourcing in-country—without the scrutiny of quarterly earnings calls, where analysts often demand precise forecasts that simply cannot keep pace with a shifting tariff regime.
Retail CEOs say that beyond protection from market gyrations, the freedom to make nimble capital-allocation decisions in private often outweighs the benefits of staying public, especially when valuation multiples have contracted. One board member from a mid-sized apparel chain commented that, after peeling back layers of cost increases due to successive tariff announcements, the executive team no longer felt comfortable committing to growth investments under the glare of Wall Street analysts. That company has since entered into exclusive talks with a private-equity group that is prepared to fund a multi-year restructuring plan—one that a public shareholder base might view as too long-term or uncertain to support.
On the flip side, private-equity firms themselves are under pressure to deploy capital selectively, mindful of the same trade-policy uncertainties that plague public markets. Historically, deal flow among retail targets has been robust, but the resurgence of higher import duties has forced many bidders to re-evaluate potential returns. Some firms argue that buying out a weakened public retailer at a lower valuation could ultimately yield stronger returns if they can realign supply chains, compress overhead and ride out any further tariff skirmishes. That view has gained traction as long-hold investors—those willing to own a business for more than a decade—seek out targets that can be enhanced operationally behind closed doors.
Another factor fueling acquisition interest: the broader macroeconomic backdrop. Consumer spending in early 2025 shows signs of softening as household budgets are stretched by higher everyday costs. In the first quarter, some leading department-store operators reported comparable-store sales declines of 3–4 percent, with executives directly citing tariff-related cost pressures as a key driver. When topline growth slows at the same time as the cost of goods sold rises, profit margins erode—making retailers look increasingly vulnerable to takeover offers promising immediate cash infusions for shareholders.
Moreover, retailers whose balance sheets show elevated debt levels have found it more challenging to refinance or access cheaper capital. Banks and bond investors, uncertain about future margin headroom in a high-tariff environment, often demand higher interest rates or covenant protections that restrict operational flexibility. By contrast, in a take-private scenario, a well-capitalized sponsor can refinance debt under less aggressive terms, extend maturities, or inject additional liquidity to fund supply-chain retooling, digital modernization or new logistics capabilities.
In some cases, even household names are quietly exploring options. One consumer-products retailer with a national footprint recently hired financial advisers to canvass potential interest from private groups. Though that company has managed to offset a significant portion of tariff costs through supplier rebates and hedging contracts, it still sees upside in moving away from the public markets—where a single tweet about potential additional duties can erase billions in shareholder value. Industry insiders say that, while no formal agreement has been announced, negotiations remain active and could conclude later in 2025 if both sides can align on a valuation that reflects the remaining tariff risk.
Not all retailers are candidates, however. Those that have reshaped sourcing to reduce exposure to offshore manufacturing, or that command pricing power in niche segments, have fared better under the shifting trade landscape. Major home-improvement chains, for instance, have been able to largely absorb new import costs because they source roughly half of their inventory domestically and maintain deep category expertise that consumers trust. As a result, these companies have retained stable public valuations and shown little interest in private bids.
Even so, the gap between retailers likely to stay public and those being considered for take-private deals appears to be widening. Executives at publicly traded retailers say that until there is a credible path to sustained stability in trade policy—whether through tariff rollbacks, broader trade pacts or clearer exemptions—they will struggle to deliver consistent guidance. Analysts project that if average effective U.S. tariffs remain at 22 percent or higher through mid-2026, more mid-cap apparel and specialty retailers could face both margin and valuation challenges severe enough to trigger buyout overtures. Some arbitrage could emerge for private-equity buyers that have the patience to carry investments for seven to ten years, even as traditional leveraged-buyout funds typically look to exit within three to five years.
For boards weighing take-private bids, the calculus often hinges on how much longer tariff volatility will linger. If negotiations between Washington and trading partners deliver meaningful relief, public valuations could recover—and staying public would likely become the preferred route once again. But if trade negotiations stall or new geopolitical tensions prompt fresh levies, the rationale for seeking shelter in private markets grows stronger. In the meantime, take-private firms are positioning themselves to move quickly whenever a board signals an openness to explore options, gathering diligence on supply chains, cost structures and digital commerce capabilities to act when the moment arrives.
Ultimately, the shift toward private ownership among tariff-stricken retailers highlights a broader dynamic in which policy uncertainty has real operational and financial consequences. For shareholders, a take-private deal often means a guaranteed premium over prevailing share prices—an attractive proposition when valuations have been battered by external shocks. For executives, operating away from the glare of public markets can facilitate long-term investments in omnichannel strategies, inventory automation and localized manufacturing—initiatives that might otherwise be sidelined if quarterly results become the sole barometer of success.
As of mid-2025, deal trackers show a clear uptick in announced take-private transactions within the retail sector, compared with the same period last year. With no sign yet of sustained tariff relief, both mid-sized and larger retailers are likely to feel continued pressure to consider a private-home approach. Whether through family backing, private-equity underwriting or combinations of strategic backers, the path to private ownership is poised to remain an increasingly well-trodden route for retailers that want to insulate themselves from the unpredictable swings of trade policy.
In the coming months, observers expect that more boards will quietly invite proposals for buyouts, if only to ensure they are not blindsided by a competing bid or sudden market decline. For now, the conflation of tariff-induced cost pressures, uneven consumer demand and lingering global supply-chain disruptions has created an environment in which taking a company private looks more like a strategic necessity than a luxury. And until a more predictable trade framework takes hold, retailers impacted by tariffs will continue to find the prospect of a private retreat an increasingly appealing way to chart a steadier course.
(Source:www.globalbankingandfinance.com)
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