Skechers USA has agreed to pay $45 million to settle Federal Trade Commission and state charges that it made unfounded claims that its toning sneakers would help people lose weight while strengthening and toning their legs, buttocks and abdominal muscles.
“The only thing that got a workout was [consumers’] wallets,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection, at a press conference this morning announcing the lawsuit and settlement, which were both simultaneously filed in U.S. District Court for the Northern District of Ohio. The money will be used for consumer refunds.
In a news release, Skechers said it ”denies the allegations and believes its advertising was appropriate, but has decided to settle these claims in order to avoid protracted legal proceedings.” The company reported it will also pay $5 million in attorney fees to settle private class action litigation.
The case comes eight months after Reebok International agreed to pay $25 million to settle similar FTC charges related to its line of toning shoes. According to the FTC, the overall market for toning shoes — described as the fastest-growing trend in footwear — was close to $1 billion in 2010.
At the press conference today, Vladeck blasted Skechers for making unsubstantiated claims about its Shape-ups, Resistance Runner, Toners and Tone-ups shoes, which sell for about $60 to $100 a pair.
According to Vladeck, the company falsely cited clinical studies that people who wore the shoes lost weight, when in fact some gained weight. “Skechers put its foot in its mouth by making unproven claims,” he said.
In the complaint, the FTC also alleged that two “independent” studies Skechers cited to substantiate its health claims were actually conducted by a chiropractor who is married to a senior vice president of marketing for Skechers. One study lacked a control group, another included relatives of the researchers as subjects.
The FTC alleged that Skechers violated Section 5(a) of the FTC Act, which prohibits unfair or deceptive acts of commerce, and Section 12, which bars false advertisements.
Under the FTC’s settlement, Skechers is barred from making claims for its toning shoes involving strengthening, weight or other health benefits unless they are true and backed by scientific evidence. However, the company may continue to make and sell the shoes, and says it plans to do so.
According to court papers, Skechers was represented by former FTC chairman Timothy Muris, now of counsel at Kirkland & Ellis, and Daniel Petrocelli, Jeffrey Barker and Maryanne Kane of O’Melveny & Myers.