3G Capital’s acquisition of Skechers marks a high-stakes test of its controversial zero-based budgeting (ZBB) strategy in the fashion sector. Known for slashing costs at Kraft Heinz, 3G now aims to apply ZBB to Skechers’ $7.4B operations.
ZBB Targets:
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Marketing: 3G Capital plans to slash celebrity endorsement budgets by 30%, phasing out high-profile partnerships with ambassadors like Snoop Dogg and Martha Stewart as part of a broader pivot toward data-driven, performance-based marketing campaigns.
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R&D: The company will consolidate Skechers’ sprawling portfolio of 45 seasonal styles into just 5 core product lines, prioritizing mass-market staples like walking shoes and workwear over niche or trend-driven designs.
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Sustainability: Skechers’ pledge to achieve carbon neutrality by 2030 now faces a 3-year delay, with 3G redirecting environmental initiative funds to supply chain optimization and cost reduction efforts.
Analyst Take:
“ZBB works for ketchup, not sneakers,” warns Bernstein’s Aneesha Sherman. “Footwear needs innovation, not just cost cuts.”
