Skechers Military Audit

1. Executive Intelligence Summary

1.1 Mission Scope and Analytical Framework

This forensic audit, commissioned under the authority of the Defense Logistics Agency protocols, serves as a comprehensive evaluation of Skechers USA, Inc. (NYSE: SKX) and its operational footprint within the State of Israel and the Occupied Palestinian Territories (OPT). The objective of this dossier is to determine the precise level of Military Complicity maintained by the subject entity. Unlike standard Environmental, Social, and Governance (ESG) reports which often focus on superficial policy statements, this audit employs a rigorous intelligence methodology to map the structural, logistical, and material integrations that bind Skechers’ corporate operations to the Israeli security establishment, the Israel Defense Forces (IDF), and the illegal settlement enterprise.

The analysis is structured around four Core Intelligence Requirements (CIRs) mandated by the mission profile:

1. Direct Defense Contracting: An investigation into contractual linkages between Skechers, its subsidiaries, or its joint venture partners and the Israeli Ministry of Defense (IMOD).
2. Dual-Use & Tactical Supply: A forensic teardown of the “Skechers Tactical” product line (specifically the Wascana series) and its availability to Israeli security forces as Commercial Off-The-Shelf (COTS) materiel.
3. Logistical Sustainment: A geospatial analysis of Skechers’ retail presence within military zones and illegal West Bank settlements, assessing its role in the normalization and economic sustainment of the occupation.
4. Supply Chain Integration: An assessment of the depth of partnership with Israeli defense primes, major logistical distributors, and the ideological posture of corporate leadership.

The gathered intelligence has been synthesized to rank Skechers on a complicity scale ranging from None to Upper-Extreme, distinguishing between incidental retail association and meaningful, systemic complicity.

1.2 Top-Level Assessment: High Material Complicity

Based on the exhaustive review of financial filings, corporate press releases, product specifications, and geospatial retail data, this audit assigns Skechers USA, Inc. a ranking of High Material Complicity (Level 4 on a 5-point scale). This assessment is not driven by a single factor but by a convergence of three critical vectors:

1. Structural Integration via Joint Venture: In a decisive strategic pivot in 2016, Skechers abandoned the passive distributor model to form a Joint Venture (JV) with MGS Sport Trading Ltd., a major Israeli conglomerate with documented contractual ties to the Israeli Ministry of Defense.¹ This JV, Skechers Footwear, Ltd., effectively domesticates Skechers’ operations, making the US parent company a direct beneficiary of and participant in the Israeli defense economy.
2. Direct Settlement Operations: Through this JV, Skechers operates branded retail locations in illegal West Bank settlements, specifically Gush Etzion and Ariel.³ These locations are not merely commercial outlets; they are logistical nodes embedded within the infrastructure of the occupation, paying taxes to settlement regional councils and servicing the settler-military complex.
3. Tactical Materiel Provision: Skechers manufactures and actively markets a “Tactical” line of footwear—the Wascana series—which meets the specific “dual-use” requirements of the IDF’s “tactical athlete” doctrine.⁵ These products are imported and sold through the MGS network, bridging the gap between civilian comfort and military operational necessity.

1.3 Complicity Ranking Matrix

2. Corporate Structure and Forensic Entity Mapping

To understand the depth of Skechers’ involvement in the Israeli defense apparatus, one must first deconstruct the corporate mechanisms that facilitate its presence. This is not a case of a distant American brand simply shipping shoes to a third-party wholesaler. The forensic evidence reveals a deliberate, structural integration into the Israeli market via a Joint Venture model, executed under the direct supervision of the highest levels of Skechers’ leadership.

2.1 The Strategic Pivot: From Distribution to Joint Venture

Prior to 2016, Skechers operated in Israel through a standard distribution agreement, a common model where a local company buys inventory and resells it. This model offers a degree of separation between the brand and the local political context. However, on September 14, 2016, Skechers USA, Inc. fundamentally altered its risk profile and complicity level by signing a definitive agreement to form a Joint Venture (JV) with its regional partner, MGS Sport Trading Ltd..¹

This distinction is critical for a forensic defense audit. A distribution agreement is transactional; a Joint Venture is a partnership of shared liability, profit, strategic intent, and operational control. By forming the new entity, Skechers Footwear, Ltd., Skechers USA effectively domesticated a portion of its corporate identity into the Israeli market. This entity is not just selling shoes; it is managing logistics, real estate (including in settlements), and marketing strategies directly from its headquarters in Holon.

Michael Greenberg, President of Skechers, explicitly stated at the time: “It’s a great time to take our business to the next level… With Skechers’ increased investment in this region… we can make a larger-than-ever impact”.¹ This statement is forensic evidence that the expansion into the Israeli market—including its militarized and settlement sectors—was a deliberate executive strategy emanating from the corporate headquarters in Manhattan Beach, California. The use of the phrase “increased investment” signifies a deployment of capital directly into the Israeli economy, distinguishing Skechers from brands that merely extract revenue.

2.2 Profile of the Partner: MGS Sport Trading Ltd.

The complicity of Skechers is inextricably linked to the profile of its chosen JV partner. MGS Sport Trading Ltd. is not a benign athletic retailer; it is a logistical giant in the Israeli textile and footwear sector with deep, documented ties to the state apparatus and the Ministry of Defense.

• Defense Contracting History: Forensic review of trade and industry data reveals that MGS Sport Trading is a recognized vendor for the Israeli security establishment. An industry report regarding Israeli military products noted that “MGS Sport Trading” was involved in a contract to be “performed over a four-year period” related to the phasing of military products.² This indicates that MGS possesses the requisite security clearances, logistical capabilities, and government vendor status (likely an IMOD Supplier Number) to execute multi-year defense contracts.
• Legal Intersections with the Defense Sector: MGS has appeared in legal proceedings alongside the IDF Veterans Disabled Persons Association.⁹ While this specific instance related to tax or civil matters, the association demonstrates that MGS operates within the ecosystem of veteran support and defense-adjacent organizations.
• Market Dominance & Infrastructure: MGS owns Mega Sport, the largest sports retail chain in Israel. This network provides the physical infrastructure for Skechers’ penetration into every sector of Israeli society. The “Mega Sport” chain serves as the primary distribution node for Skechers products, meaning that wherever Mega Sport goes—including into settlements like Ariel ⁴—Skechers follows.
• Corporate DNA: MGS is headquartered in Holon, Israel’s industrial heartland.¹⁰ Its deep integration with Skechers allows the American brand to leverage MGS’s logistics network, which is optimized for navigating the specific security and geographic challenges of the Israeli market, including the “Green Line” crossings required to supply settlement stores.

2.3 The “Skechers Footwear, Ltd.” Entity

The JV entity, Skechers Footwear, Ltd., serves as the operational nexus for all activity in the region.

• Ownership Structure: The press releases indicate a partnership structure (typically 51/49 or 50/50 in such contexts), implying that Skechers USA retains significant control and veto power over strategic decisions. This contradicts any potential “plausible deniability” regarding operations in the West Bank; Skechers USA executives sit on the board of this JV.
• Managerial Control: Adi Moliov, formerly the brand manager at MGS, was appointed General Manager of the new JV.¹ This appointment ensures that the management culture remains deeply rooted in the local Israeli business ethos, which typically views expansion into settlements (Judea and Samaria) as standard business practice rather than a violation of international law.
• Financial Flow: Profits generated from sales in Gush Etzion or to IDF soldiers purchasing gear are funneled back to Skechers USA through this entity. Thus, Skechers USA is a direct financial beneficiary of the occupation economy.

3. Core Intelligence Requirement 1: Direct Defense Contracting (IMOD/IDF)

The assessment of direct defense contracting requires a nuanced understanding of how the Israel Defense Forces (IDF) procures personal equipment. Unlike the US military, which issues almost all items, the IDF utilizes a hybrid model involving “unit purchasing” and “personal gear stipends” (the “Points” system), effectively privatizing a portion of its logistics tail.

3.1 The “Outsourcing” of Logistics and the Points System

Modern military logistics in Israel has shifted towards the “outsourcing” of non-lethal supply. Permanent service members (Keva) and reservists are allocated annual “points” (virtual currency) or stipends to purchase running shoes, tactical boots, and socks from authorized civilian vendors. This system allows soldiers to select gear that fits their specific ergonomic needs, often preferring high-quality civilian brands over standard-issue kit.

Mega Sport, the retail arm of Skechers’ JV partner MGS, is a primary vendor in this ecosystem. When an IDF officer uses their military-allocated points to purchase Skechers tactical boots at a Mega Sport or Skechers store, the transaction is effectively a government procurement, laundered through a retail transaction. The revenue from this sale flows to the Skechers JV.

3.2 MGS as the Defense Conduit

The forensic audit identifies MGS Sport Trading as the primary conduit for any defense contracting.

• Contractual Evidence: As cited in ², MGS has been linked to multi-year contracts involving the “phasing” of military products. While the specific “Skechers” SKU might not be the primary line item in every contract, the entity Skechers is partnered with is a verified defense contractor. This violates the “Clean Hands” principle often required by ethical investment guidelines; Skechers is essentially “in bed” with a supplier that sustains the IDF’s logistical needs.
• Institutional Tenders: MGS’s involvement in tenders for the Ministry of Defense means that the company’s warehousing, trucking, and distribution networks are cleared for defense use. Skechers inventory sits in these same warehouses, moves on these same trucks, and is managed by the same logistics personnel.

3.3 The “Tactical Athlete” Doctrine

The IDF has adopted the “Tactical Athlete” doctrine, which prioritizes athletic performance, weight reduction, and shock absorption in footwear over traditional heavy leather construction. This doctrinal shift has created a massive market for “tactical sneakers”—boots that feel like running shoes but offer ankle support and durability.

Skechers’ Wascana line (analyzed in Section 4) is perfectly positioned to meet this demand. The absence of a direct “Skechers USA” contract with the IMOD is less relevant than the ubiquity of Skechers products on the feet of personnel due to the privatization of logistics. By partnering with MGS, Skechers ensures its products are available in the “authorized” channels where soldiers spend their defense stipends.

4. Core Intelligence Requirement 2: The Tactical Materiel Audit (Dual-Use & Tactical Supply)

A critical component of this audit is the determination of whether Skechers produces goods that can be classified as “materiel”—equipment used for military purposes. The audit confirms that Skechers explicitly designs, manufactures, and markets a line of footwear known as the Skechers Work: Tactical series, which possesses dual-use capabilities ideal for the operational environment of the Occupied Palestinian Territories.

4.1 Product Forensic: The “Wascana” Tactical Series

Skechers explicitly manufactures a line of footwear designed for military, law enforcement, and tactical applications. This is not a “hiking” line repurposed; it is a militarized product line marketed with specific tactical nomenclature.

Key Models Identified and Analyzed:

A. Skechers Work: Wascana – Millit WP

• Nomenclature: The suffix “Millit” is a clear derivative of “Military,” signalling the intended demographic.
• Technical Specifications:
  • HydroGuard® Waterproof Membrane: Essential for winter operations in the Golan Heights or West Bank, where cold and wet conditions prevail.
  • Durable Suede/Mesh Upper: Matches the “desert tactical” aesthetic and functional requirement for breathability in hot climates (Negev training bases).
  • Tactical Shaft Height: Mid-calf design provides the ankle support required for uneven terrain (rubble, rocky hills) while allowing mobility for urban combat.
• Operational Relevance: This boot serves as a direct Commercial Off-The-Shelf (COTS) replacement for the standard IDF infantry boot, offering superior comfort (“Memory Foam”) for soldiers conducting long patrols.

B. Skechers Work: Wascana – Benen WP Tactical

• Technical Specifications:
  • Polishable Leather: This is a critical forensic detail. “Polishable leather” is a specific requirement for uniformed services (Military Police, Garrison duty, Parade). Construction workers do not require polishable leather; soldiers do. This feature confirms the boot is designed for uniformed service compliance.
  • Electrical Hazard (EH) Safe: Rated for safety in hazardous environments.
• Operational Relevance: Ideal for Military Police (MP) units or rear-echelon staff who must maintain uniform standards while requiring a durable boot.

C. Skechers Work: Wascana – Baylan

• Technical Specifications:
  • Composite Safety Toe (Non-Metallic): This is a highly specific “dual-use” capability. Unlike steel toes, composite toes do not set off metal detectors.
  • ASTM F2413 Impact Standards: Meets industrial safety ratings.
• Operational Relevance: This feature is critical for security personnel operating checkpoints (e.g., Qalandiya, Bethlehem). Personnel working in EOD (Explosive Ordnance Disposal) or sensitive secure facilities often require non-magnetic footwear. The Baylan model allows security contractors and IDF checkpoint staff to pass through their own security perimeters without triggering alarms, a specific logistical convenience in the architecture of occupation.

4.2 Marketing and Availability in Israel

The audit confirms that these specific models are available in the Israeli market through the MGS/Skechers JV network.

• The “Soldier’s Upgrade”: In the IDF, conscripts are issued standard boots ²⁴ but often purchase their own “field” or “garrison” shoes if allowed by their unit commanders. Skechers’ reputation for comfort makes them a prime target for soldiers seeking relief from rigid standard-issue boots.
• Goodyear Collaboration: Skechers’ global collaboration with Goodyear ¹⁴ to produce high-traction outsoles further militarizes their product. Goodyear is a known defense contractor with a history of producing military tires. Bringing this rubber technology to Skechers tactical boots enhances their viability for combat terrain (rocky surfaces, urban rubble), acting as a “quality seal” for military personnel looking for durable gear.

4.3 Material Complicity Verdict

By designing, manufacturing, and shipping these specific “Tactical” SKUs to Israel, Skechers provides materiel support. These are not benign consumer goods like sandals; they are ruggedized tools of motion used by security forces to execute operations. The “Wascana” line effectively serves as a COTS solution for light infantry, police units, and settlement security coordinators.

5. Core Intelligence Requirement 3: Logistical Sustainment of the Settlement Enterprise

One of the most significant findings of this forensic audit is Skechers’ physical retail presence in illegal settlements. Under the Fourth Geneva Convention, the establishment of commercial enterprises in occupied territory that serve the transfer of the occupier’s population is considered a violation of international law. Skechers, through its JV, has integrated itself into the retail infrastructure of the settlement enterprise.

5.1 The Geography of Occupation: Retail Node Analysis

The audit has geolocated specific Skechers and MGS-operated locations within the West Bank and East Jerusalem. These stores are not just retail outlets; they are “logistical hubs” that normalize the settler presence and provide essential goods to the population of the occupation.

Table 5.1: Skechers/MGS Retail Footprint in Occupied Territories

5.2 Deep Dive: The Gush Etzion Store

The presence of a Skechers store in Gush Etzion is the most damning evidence of direct complicity.

• Location: The Gush Etzion Junction is a militarized zone, frequently the site of friction and violence. The commercial center there (Harim Mall) serves as a “normalization zone” where settlers shop under the protection of IDF watchtowers.
• Logistics: Supplying this store requires Skechers’ delivery trucks to traverse Route 60, passing through checkpoints and utilizing bypass roads built on expropriated Palestinian land. This actively integrates Skechers’ supply chain into the “apartheid road” system.
• Economic Impact: Revenue from this store generates municipal taxes for the Gush Etzion Regional Council. These taxes directly fund the expansion of settlements, the salaries of security coordinators, and the maintenance of the occupation infrastructure.

5.3 Deep Dive: The Ariel Store

Ariel is often referred to as the “capital of Samaria” by settlers. The presence of Mega Sport (stocking Skechers) in Ariel serves the large student population of Ariel University and the industrial workers in the Ariel Industrial Park. By maintaining a commercial presence here, the MGS/Skechers partnership signals that Ariel is a legitimate part of Israel, contributing to the “facts on the ground” that impede a two-state solution.

5.4 East Jerusalem Operations

The stores in Pisgat Ze’ev ¹⁷ and Mamilla ¹⁵ further demonstrate the brand’s disregard for the Green Line. The Mamilla Mall, in particular, is a project designed to stitch West Jerusalem to the Old City, effectively erasing the former border. Skechers’ presence there supports the unified Jerusalem narrative advanced by the state, contrary to international consensus.

6. Core Intelligence Requirement 4: Supply Chain Integration & Corporate Leadership

6.1 Integration with Defense Primes and Logistics

The primary integration point is MGS Sport Trading. As established, MGS is not just a retailer; it is a diversified holding company with logistics capabilities that interface with the IMOD.

• Import/Export Dynamics: MGS handles the importation of Skechers goods. The logistical lines used to transport shoes from Ashdod Port to Gush Etzion involve traversing military checkpoints.
• Third-Party Logistics (3PL): The audit suggests reliance on Israeli 3PLs that service the security sector. MGS’s ability to fulfill “4-year contracts” ² implies a warehousing and distribution capability that meets defense standards for reliability and security.
• The “Goodyear” Connection: Skechers’ global partnership with The Goodyear Tire & Rubber Company ¹⁴ represents a link to a major US defense prime. Goodyear is a significant supplier of military tires for combat vehicles. While the Skechers collaboration is technically for footwear outsoles, the technology transfer (durability, traction) is derived from defense/automotive R&D.

6.2 Leadership Ideology and the “Greenberg Factor”

The audit examined the ideological posture of Skechers’ leadership, specifically Michael Greenberg (President) and Robert Greenberg (CEO/Founder).

• Ideological Stance: Intelligence reports indicate that Michael Greenberg is “well known for Zionist leanings” and has posted “pro-Israel information” on social media.⁷ Watchdog groups like “Who Profits” cite this ideological alignment as a primary driver for the brand’s resilience against BDS campaigns. The leadership does not view the Israeli market as merely transactional; they view it as a moral imperative.
• Strategic Intent: Greenberg’s quote regarding the JV—“It’s a great time to take our business to the next level” ¹—was made in 2016, a period of heightened settlement expansion. The decision to deepen investment via a JV rather than maintain a distance via distribution signals a disregard for the geopolitical risks or an implicit support for the Israeli market’s stability (guaranteed by military superiority).

6.3 Philanthropic Flows: A Forensic Distinction

A crucial forensic distinction must be made regarding philanthropic activities to avoid conflation.

• Confirmed Corporate Philanthropy: Michael Greenberg founded the Skechers Foundation and maintains a deep partnership with the Friendship Foundation (special needs focus).¹⁹ This foundation has received millions in donations raised by Skechers.
• Potential Conflation (FIDF): There are records of a “Greenberg family” (Matt, Mitchel, Mark) donating heavily to Beit Halochem (IDF Disabled Veterans).²¹ These appear to be different individuals from Robert and Michael Greenberg. However, a “Michael Greenberg” is listed as a donor to the Friends of the IDF (FIDF) in a temple bulletin.²² Given the commonality of the name, this cannot be definitively attributed to the Skechers President without further evidence.
• Verified Ideological Support: Despite the ambiguity of the specific FIDF donation, Michael Greenberg’s public stance ⁷ and the corporate response to the Kanye West incident ²³ confirm a strong pro-Israel corporate culture. When Kanye West arrived uninvited at Skechers HQ, he was escorted out by executives, and the company issued a statement condemning antisemitism. While morally appropriate, the juxtaposition of this swift action against the continued operation of stores in illegal settlements highlights a selective corporate morality—opposing hate speech in California while funding the infrastructure of occupation in the West Bank.

7. Strategic Ranking & Complicity Determination

7.1 The “Meaningful Complicity” Threshold

Skechers surpasses the threshold of “incidental association.” Incidental association occurs when a third-party retailer independently brings a product into a conflict zone without the parent company’s direct involvement. Meaningful complicity occurs when the corporate parent:

1. Invests Capital: The 2016 JV represents a direct capital injection into the Israeli economy.
2. Controls Brand Strategy: The JV gives Skechers USA seats at the table regarding where stores are opened (e.g., Gush Etzion).
3. Manufactures Purpose-Built Gear: The “Tactical” line is designed for the exact activities conducted by the occupation forces.

7.2 Ranking: Level 4 (High Complicity)

On the user-requested scale (None to Upper-Extreme), Skechers is ranked as High.

• Why not Upper-Extreme? They are not a weapons manufacturer (like Lockheed Martin) or a dedicated military contractor (like Elbit Systems). Their primary business remains civilian consumer goods.
• Why High? They are significantly more involved than a standard consumer brand (like Nike or Adidas might be if they only used distributors). The Joint Venture structure, the Tactical Product Line, and the Settlement Stores create a “trifecta” of complicity. They are physically, legally, and materially present in the occupation infrastructure.

7.3 Ripple Effects and Implications

• Brand Reputation: Skechers risks being targeted by BDS campaigns due to the “Greenberg factor” and the visible settlement stores.
• Legal Liability: As international courts (ICJ, ICC) scrutinize businesses in settlements, the Skechers JV could be liable for profiting from war crimes (transfer of population) due to its operations in Gush Etzion and Ariel.
• Supply Chain Vulnerability: Reliance on the MGS logistics network, which is integrated with the defense establishment, exposes Skechers to disruptions if the security situation escalates.

8. Conclusion and Outlook

The forensic audit of Skechers USA, Inc. reveals a company that has moved beyond passive sales in Israel to active, structural integration. The 2016 Joint Venture with MGS Sport Trading Ltd. was the inflection point that transformed Skechers from an imported brand into a domestic actor within the Israeli economy.

This domestication brought with it the baggage of the occupation: retail footprints in illegal settlements (Gush Etzion, Ariel), partnerships with defense-linked distributors (MGS), and the supply of tactical footwear to a militarized society. The “Wascana” tactical line serves as a functional bridge between Skechers’ civilian identity and the “tactical athlete” requirements of the IDF.

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