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O'Dwyer's Newsletter - May 21, 2012 - Vol. 45 - No. 21 (download PDF version)

Page 7 Pages 1, 2, 3, 4, 5, 6, 8


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 marketing materials cited by the FTC.

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.

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 they agree 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, which found no evidence that toning shoes such as Skechers help wearers exercise more intensely, burn more calories or improve muscle strength and tone.

The FTC said May 17 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.

Skechers leads the “toning shoe” category with Reebok, which paid a $25M settlement to the FTC last year amid similar claims.


Joseph Jacuzzi, GM of communications in a short stint at Ford Motor Company’s Lincoln operation, has rolled to Audi of America as chief communications officer.

Jacuzzi takes the slot vacated by Jeff Kuhlman, who left Audi in December to head global communications at Nissan. He was previously VP of communications for PepsiCo's beverage division before joining Ford earlier this year.

Audi of America president Johan de Nysschen said the company “look[s] forward to his valuable insights and support as we continue to strive to take Audi to its full potential here in the U.S.”

The German luxury carmaker’s U.S. operation is based in Herndon, Va.

Jacuzzi was previously with General Motors in the

U.S. and abroad during eight years, and earlier held posts at Shelby Automobiles and Mitsubishi. He worked on the agency side at Bob Thomas and Associates.

Brad Stertz, a former reporter and editor for the Wall Street Journal, Detroit News and (Hampton Roads, Va.) Daily Press, is corporate communications manager.


Rasky Baerlein Strategic Communications has a $450K research and development contract with Hungary through the rest of the year to access the image of the European state.

The goal is to explore the "opportunities of the uniform and positive public perception and presentation of Hungary in the U.S. on the basis of the research plan."

According to that plan, RBSC is to map the "true or false opinions, cultural and historical clichés related to Hungary and to find new solutions to influencing these with the tools of cultural and political communications."

Hungary wants an ongoing “cultural presence abroad to effectively develop the related PR and PA activities and country brand management.”

The country also wants a “friendship lobbying” with neighboring states to present a “common shared fate and the ideal of living together in tolerance in terms of cultural diplomacy, current politics and economic policy.”

RBSC's contract is with the Ministry of Public Administration and Justice.


5W Public Relations represents Jacob Ostreicher, the Brooklyn flooring contractor who has been jailed without formal charges in Bolivia for nearly a year.

The 53-year-old Ostreicher invested in a rice farm in Bolivia. He claims the manager of the operation, who turned out to be linked to a Brazilian drug trafficker, stole money from the project. When he flew to Bolivia to investigate, Ostreicher was arrested on money laundering charges after investigators discovered the farm was on land owned by a drug gang.

Ronn Torossian, CEO of 5W, said his firm was hired by the family of Ostreicher. He promises a “full-scale campaign,” an effort that already features the site and has received media play on CNN, Fox and “Nightline.”

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