Shoe marketer Skechers is relying on Addo Communications for PR support as the company manages fallout from its $50M settlement over false advertising allegations.
Skechers enlisted celebrity endorsers as part of a broad marketing campaign for its Shape-ups line of shoes, which the company said improved muscle tone and health. “Get in shape without setting foot in a gym,” was a claim used in marketing materials.
Skechers marketing materials. |
A handful of other Skechers brands were also targeted by regulators.
The company, which remains defiant in its belief that the ads were “appropriate,” said May 16 that its agreed to pay out $45M along with $5M in class action attorneys’ fees after a bevy of probes and legal action from the Federal Trade Commission, state attorneys general and consumer class actions.
“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,” chief financial officer David Weinberg said in a statement.
Addo Communications, the Santa Monica, Calif., firm of ICR veteran Andrew Greenebaum, is supporting financial communications for Skechers, which has faced a steady decline from its $43.85 peak share price in 2010 amid lawsuits and declining market share.
The company brought in Sitrick and Company in 2010 to fight off an early salvo in the battle over its marketing claims by the American Council on Exercise.
The FTC said Wednesday that Skechers’ marketing claims went too far in touting health benefits from the shoes. “Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”
The company enlisted football great Joe Montana and actresses Kim Kardashian and Brooke Burke in its high-profile pitch for Shape-ups. Kardashian appeared in a Super Bowl ad last year touting the fitness benefits of the shoes.
The FTC noted the deal follows last year’s $25M fine paid by Reebok International over similarly misleading ads.
Under the settlement, Skechers is barred from claiming its toning shoes aid strengthening or weight loss, among other claims, unless it provides scientific evidence.
Consumers who bought the shoes are eligible for refunds from the FTC or through the class-action lawsuit.
Skechers president Michael Greenberg said the company has received “overwhelmingly enthusiastic feedback” from thousands of customers of the fitness shoes.
“The company fully stands behind its toning shoe products and technology and is permitted under the settlement to continue to advertise that wearing rocker-bottom shoes like Shape-ups can lead to increased leg muscle activation, increased calorie burn, improved posture and reduced back pain,” he said.