Skechers to Pay $40 Million in FTC Settlement Over 'Toning Shoes'23 May, 2012 By: Jackie Jones
WASHINGTON – Skechers USA Inc. has agreed to pay $40 million to settle charges it deceived consumers with claims that its Shape-ups and other “toning” shoes would help people lose weight and strengthen muscles, according to an official statement by the Federal Trade Commission (FTC).
Consumers who bought Shape-ups, Resistance Runners, Toners, and Tone-ups shoes will be eligible for refunds, and Skechers will pay an additional $5 million to 42 states. It is the largest settlement the FTC has had in terms of actual cash being sent to consumers, according to David Vladeck, director of the FTC’s Bureau of Consumer Protection.
“Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health,” Vladeck said. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”
“You don’t have to be Don Draper to know that health benefits attract consumers,” he added at a press conference last week.
Skechers released a statement saying the settlement was a business decision, and it continues to stand behind its products, denying that any false claims were made.
“While we vigorously deny the allegations made in these legal proceedings and looked forward to vindicating these claims in court, Skechers could not ignore the exorbitant cost and endless distraction of several years spent defending multiple lawsuits in multiple courts across the country,” said David Weinberg, Skechers’ chief financial officer.
The settlement with Skechers, which is based in Manhattan Beach, Calif., is part of the FTC’s ongoing efforts to stop “overhyped advertising claims,” the FTC said, and follows a similar settlement with Reebok Intl. Ltd. from last year. Reebok paid $25 million as part of a FTC settlement over allegations the company deceptively advertised its EasyTone and RunTone shoes, but continued to back its products, saying the settlement was just to avoid a “protracted legal battle” (Response This Week, Oct. 5, 2011).
“The FTC wants national advertisers to understand that they must exercise some responsibility and ensure that their claims for fitness gear are supported by sound science,” Vladeck said of the Reebok case at the time.
Toning shoes were once a rapidly growing segment of the athletic shoe market, with sales jumping from $50 million in 2008 to $1.1 billion in 2010. Skechers held the largest share of the market – part of the reason its settlement amount was so much more than Reebok, the FTC said – totaling 49 percent at its highest level. Sales of toning shoes took a nosedive last year, though, dropping 50 percent to $550 million in 2011.