One of the many Skecher shoes with "tone-ups" technology, shown… (Jay L. Clendenin/Los Angeles…)
WASHINGTON -- Skechers USA defended its claims about the health benefits of its toning shoes, but said it agreed to settle false advertising allegations made by federal and state officials to avoid lengthy legal battles.
The cost of the settlements were high for Skechers, which was the leader in a market estimated to be $1 billion when it peaked in 2010 before questions were raised about the claims made about toning shoes.
The Federal Trade Commission announced a $40-million settlement Wednesday, and a group of 44 state attorneys general announced an additional $5-million settlement. Most of the money to be distributed as refunds to consumers who bought Shape-ups or other Skechers toning shoes.
Skechers said the total cost of the settlements would be $50 million because the Manhattan Beach company also agreed to pay $5 million in class-action attorney costs.
“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.
“This settlement will dispose once and for all of the regulatory and class-action proceedings,” he said.
Skechers noted the settlements do not prevent the company from selling the rocker-bottom toning shoes or making claims about their benefits based on the technology, which has been backed up by at least 19 reports in peer-reviewed clinical and sports medicine journals over the past 15 years.
Company President Michael Greenberg said that wearing Shape-ups., Tone-ups and other toning shoes "can lead to increased leg muscle activation, increased calorie burn, improved posture and reduced back pain."
“The company has received overwhelmingly enthusiastic feedback from literally thousands of customers who have tried our toning shoes for themselves and have written unsolicited testimonials about their positive experiences — not just with our products’ exercise benefits, but also with their well-known comfort and style," he said.
But federal and state officials told a different story Wednesday. They said Skechers made false and unsubstantiated claims in high-profile ads, such as one featuring celebrity Kim Kardashian that aired during the 2011 Super Bowl, that people who wore the shoes would lose more weight and get more muscle tone than they would with regular fitness shoes.
"But when comparing its toning footwear to standard fitness shoes, Skechers put its foot in its mouth by making unproven claims that its toning footwear strengthened muscles, increases weight loss, reduces body fat and improves circulation and aerobic conditioning," said David Vladeck, director of the FTC’s Bureau of Consumer Protection.
The FTC's complaint against Skechers alleged the studies cited by the company had defects, including incorrectly reporting results.
"They said that people lost weight when in fact they gained weight," Vladeck said.
Consumers who bought the shoes, which sold for $60 to $100 a pair starting in 2009, are eligible for refunds from the settlement of all or some of the cost, depending on how many people apply. Information about the refunds is available at www.ftc.gov/skechers.
[For the Record, 11:52 a.m., May 16: An earlier version of this post said the settlement was announced Tuesday. It was announced Wednesday.]