Skechers (SKX) Confirms Settlement in Shape-Ups Advertising Cases
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Skechers USA, Inc. (NYSE: SKX) today announced that it has settled all domestic legal proceedings relating to advertising claims made in connection with marketing its toning shoe products, including its Shape-ups® line of shoes. As discussed in the Company’s previous annual report filed with the Securities and Exchange Commission, the Company has been involved in legal proceedings brought by the United States Federal Trade Commission, multiple states’ Attorneys General and consumer class action lawyers, all investigating whether or alleging that the Company made unsupported advertising claims in connection with marketing its toning shoes. As previously disclosed in the Company’s annual and quarterly reports with the Securities and Exchange Commission, the Company will pay a one-time settlement of $45 million dollars plus $5 million in class action attorneys' fees to settle the domestic advertising matters and related claims on a global basis.
Skechers denies the allegations and believes its advertising was appropriate, but has decided to settle these claims in order to avoid protracted legal proceedings. The one-time settlement is expected to result in substantial net savings for the Company compared to the significant long-term cost of defending against multiple regulatory and civil legal proceedings in numerous jurisdictions. The Company will not be paying any fines or penalties.
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Skechers denies the allegations and believes its advertising was appropriate, but has decided to settle these claims in order to avoid protracted legal proceedings. The one-time settlement is expected to result in substantial net savings for the Company compared to the significant long-term cost of defending against multiple regulatory and civil legal proceedings in numerous jurisdictions. The Company will not be paying any fines or penalties.
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