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Privacy Policy

Tremblant Capital ("Tremblant") does not disclose nonpublic personal information about our clients or former clients to third parties other than as described below.

Tremblant collects personal information about you in connection with our providing advisory services to you or in correspondence and conversations with Tremblant’s representatives. This information may include other information such as your:

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Tremblant collects this information from you through various means. For example when you give Tremblant your contact information, enter into an investment advisory contract with us, buy securities (i.e., interests in a fund) from Tremblant, tell Tremblant where to send money, or make a wire transfer. Tremblant also may collect your personal information from other sources, such as our affiliates or other non-affiliated companies.

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Intensity, Collaboration
& Respect

Our Team

Tremblant Capital brings together a cohesive team of accomplished professionals in a culture that emphasizes ownership within areas of expertise, and collaboration across areas of commonality. We employee a committee-based approach which enables a diversified review and analysis of our business. Internal Committees include Partners, Investment and Risk, Best Execution, Compliance, Valuation, ESG and Diversity, Equity & Inclusion Committee.

Mr. Barakett, Chairman and CIO, focuses his time and energy on the investment process by heading the Investment/Risk Committee, interacting with the Sector PMs and dedicated Data Sciences group, and meeting with company management teams. Our experienced Investment team have been trained in Tremblant’s methodology and bring a nuanced understanding of their areas of specialization to the Firm. Mr. Eckert, President and COO, oversees all non-investment activities of the firm to ensure Tremblant Capital's institutional infrastructure provides support and operational stability for the investment process.

We have always been committed to cultivating and preserving a culture of diversity, equity and inclusion with our employees. We embrace and encourage our employees’ differences in age, color, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique and bring a differentiated perspective. Diversity, equity and inclusion is a key component of our business strategy, allowing us to (1) attract and retain top talent from all talent pools and enable people to perform to their full potential and (2) to create greater innovation for our clients and our business through inclusion of different and various perspectives. Please find our Diversity, Equity & Inclusion Policy here.

Senior Leadership

Average of 20 years at Tremblant / Average of 25+ years total professional experience.

Brett Barakett

Partner, Chairman & Chief Investment Officer

24 years / 37 years

Brett Barakett is the Founder, Chairman, and Chief Investment Officer of Tremblant Capital, a global public equity investment firm. He is responsible for managing the firm's investment process, overseeing risk management, and attracting, developing and retaining talent.

Prior to founding Tremblant Capital in 2001, Brett was a Portfolio Manager at Moore Capital Management, an Equity Analyst at Salomon Brothers, a Global Director at Reebok International, and a Brand Manager at Procter & Gamble. His background first as an operating manager and then as an investment manager played a critical role in shaping Tremblant’s investment approach and process.

Brett currently serves on the Advisory Board at the Ivey Business School at Western University, where he earned an undergraduate HBA (Honors Business Administration), and on the Board of Dean’s Advisors for the Harvard Business School, where he received his MBA. Brett has also served as a Trustee of Greenwich Academy, and has been a hockey coach in his community.

Michael Cling

Partner, Sector PM - Media, Internet & Telecommunications

20 years / 27 years

Michael Cling joined Tremblant in 2005.  Michael is a Partner, and Portfolio Manager responsible for investments in the Media, Internet, and Telecommunications sectors where he has 25 years of investing experience. He is a member of the Investment and Risk Committee.

Prior to joining Tremblant, Michael worked at Ivory Capital Group, and The Blackstone Group.  He began his career as an Investment Banking Analyst at Lehman Brothers.

Michael received a BS from Georgetown University in International Economics in 1998.

Jim Eckert

Partner, President, Chief Operating Officer

24 years / 31 years

Jim Eckert joined Tremblant from its inception in 2001. Jim is a Partner, President and Chief Operating Officer where he is responsible for overseeing Middle Office and Controllers Group, Investor Relations, Legal and Compliance, Corporate Finance, Human Resources, Technology and Trading functions. He is a member of the Investment and Risk Committee, Best Execution Committee, and Compliance Committee.

Prior to joining Tremblant, Jim worked at Tudor Investment Corporation and began his career at Ernst & Young as an auditor in the Financial Services group.

Jim received a BS in Accounting from the University of Albany and holds a CFA charter.

Nick Onofrey

Partner, Head of Data Sciences

23 years / 23 years

Nick Onofrey joined Tremblant in 2002. Nick is responsible for leading Data Sciences research, and serves as co-chair of the ESG Committee.
 
Nick received an MS in Computational Linguistics in 2002, and a BS in Psychology/Linguistics in 2000 from Georgetown University. In 2012 he received an MBA from New York University Stern School of Business.

Manish Patel

Partner, Sector PM - Technology, Entertainment & Leisure

18 years / 24 years

Manish Patel joined Tremblant in 2007.  Manish is a Partner, and Portfolio Manager responsible for investments in the Technology, Entertainment, and Leisure sectors, where he has 21 years of investing experience. He is a member of the Investment and Risk Committee.

Prior to joining Tremblant, Manish worked at JMI, and Bain & Company.  

Manish received an MBA from The Wharton Business School in 2007, and a BS in Economics from Drexel University in 1999.

Brian Rabin

Partner, Sector PM - Retail & Consumer & Co-Head of ESG Strategy

20 years / 31 years

Brian Rabin joined Tremblant in 2005.  Brian is a Partner, and Portfolio Manager responsible for investments in the Consumer and Retail sectors where he has 29 years of investing experience. He is a member of the Investment and Risk Committee, and the ESG Committee.

Prior to joining Tremblant, Brian worked at Trisun Capital, Putnam Investment Management, and EnTrust Capital Inc.  He began his career as a Financial Analyst at Goldman, Sachs & Co.

Brian received an MBA from Harvard Business School in 2001, and a BA from Northwestern University in Mathematical Methods in Social Sciences and Economics in 1994.

Austin Stephen

Partner, Head of Business Development

11 years / 16 years

Austin Stephen joined Tremblant in 2014. Austin is a Partner, and Head of Business Development. He was previously a Portfolio Manager with Tremblant responsible for investments in the Generalist area and has 14 years of investing experience.

Prior to joining Tremblant Austin worked at Advent International. He began his career as an Investment Banking Analyst at Lehman Brothers.

Austin received an MBA from Harvard Business School in 2014, and a BS in Finance and Accounting from Indiana University in 2006.

Tremblant Header

December 1, 2021

CC: Skechers Board of Directors

David and John,

Thank you for spending half a day helping us better understand the impressive business that you, the Greenberg family, and the entire team have thoughtfully built over the past thirty years. As we examine your market opportunity, product, pricing, brand, and distribution capabilities we remain extremely enthusiastic about the future of Skechers.

As long-term shareholders, we share your view that the best way to create lasting shareholder value is by growing the brand. Following our distribution center (“DC”) tour, we understand the capital investments in your DC will support growth, improve your e- commerce capabilities, reduce labor costs, and increase optionality through potential drop- ship partnerships down the road. Additionally, we appreciate the progress towards diversifying your board (Ms. Blair’s appointment in May 2019), additional communication on ESG topics such as sustainable materials and Uyghur labor concerns (March 2020), and instituting annual guidance (April 2021). We believe these changes improve both your business and the investment case.

Since Skechers has been among our top holdings for years, we are frequently asked by our own investors, “Why is Skechers so inexpensive?” Honestly, this question is puzzling to us as well since the fundamentals of your business are better than peers over an extended period of time. Specifically, over the past decade, Skechers has grown revenue faster than Nike, Adidas, Puma, Under Armour, Crocs, and any other relevant peer. While Skechers’ margins are lower, we remain confident in the margin progression and in the view that Skechers’ margins have greater upside potential than peers. Despite these impressive facts, Skechers continues to trade at less than half of the earnings multiples of these peers. In our experience, the businesses with the highest sustainable growth tend to trade at premium multiples over peers, not discounts.

Skechers is unique among its peers because the founding family continues to control the business through super-voting shares. The evidence would suggest that the Greenberg family has proven to be arguably the best management in all of footwear in recent years. However, we often hear concerns about SG&A volatility, lack of dividends, lack of buybacks, lack of capital markets days, lack of internal investor relations, and frequent share sales by insiders. Those not involved in the stock (or in some cases short) point to these factors and suggest that the family is not truly focused on shareholders. This narrative is limiting value creation for all shareholders, including the Greenberg family.

We know management is highly aligned with shareholders as the Greenberg family owns ~1.1B of stock. However, we believe our suggestions could create greater than $4B of incremental value over the next ~10 years just for the Greenberg family alone, and we are happy to walk you through our assumptions. Most of these concerns can be addressed relatively easily. We believe once those concerns are addressed, shareholders will likely feel so aligned with management and the Greenberg family that unease around the founding family dynamics will dissipate, driving the multiple higher and creating tremendous value for all shareholders. Beyond the obvious shareholder value creation, we believe a higher share price would create additional value by attracting more top talent, motivating employees through RSU’s, and allowing potentially accretive acquisitions down the road.

We suggest the following:

  • Eliminate the Dual Share Class Structure (by removing super-voting shares)
    • In our view, this is the single largest overhang on the stock. While we are not suggesting any changes to the day-to-day operations of the business, this change would reassure the market that Skechers will continue to be run in shareholders’ best interests.
    • We believe the family absolutely should continue to hold the same key management positions and significant Board representation.
  • Initiate an Aggressive Buyback
    • We believe Skechers can conservatively buyback ~40% of the business over the next 10 years (unless there is material multiple expansion during that period) while still continuing to build a net cash balance sheet.
      • This results in a greater than 60% uplift to EPS in year 2030 (versus no buybacks)
    • This additional EPS growth and prudent capital allocation should close the multiple gap over time creating another ~100% upside (because peers trade at more than twice SKX’s current forward multiple)
      • We do not expect this multiple gap to close quickly. Additionally, as long-term shareholders, we hope that the multiple remains low so the company can buyback more shares!
    • Lastly, this would highlight that your own shares are more attractive than any potential acquisition in the market right now which is something we strongly believe
  • Initiate a Dividend
    • Even a small dividend reduces the need for insider share sales
    • Attracts a more diverse investor base
    • Reduces total shareholder return volatility
    • Illustrates the sustained earnings power of the business
  • Host a Capital Markets Event
    • Shows the active engagement of management with shareholders
    • Highlights the value of higher growth, under-earning markets where shareholders have historically received little detail and thus been unwilling to ascribe value
    • Explains the expense savings achieved through significant DC investments in recent years, and the corresponding increase in excess cash flow going forward
    • Provides a forum in which to show a clear path to medium-term revenue and earnings targets, reducing focus solely on quarterly results
  • Internal Investor Relations
    • Someone working closely with John Vandemore (CFO) should be able to host more prospective investor conversations, allowing the company to cast a wider net for interested investors
    • Consistent with other players in the industry, it shows a concern for shareholders and it frees up more of John’s time for other responsibilities including growth strategy, capital allocation, and expense management

As promised, we have sent The Outsiders by William Thorndike. We hope that you will share these copies with the Greenbergs and other Board members as we believe these detailed examples of eight CEOs whose stocks outperformed the S&P by over 20x during their tenures are quite powerful. More importantly, their strategies are repeatable and applicable in the case of Skechers as it is a sustainable, highly cash generative business trading at an inexplicably low multiple. This creates the opportunity to generate many billions of dollars in value for the Greenberg family and other shareholders through thoughtful capital allocation that focuses on maximizing long-term shareholder value.

We look forward to continuing the discussion. Once again, thank you for taking the time to explain some of the exciting aspects of your business at your DC recently.

Sincerely,

Brett Barakett, Austin Stephen, and Bryan Walsh

Tremblant Capital Group