On May 16, 2012, the Federal Trade Commission (FTC) announced that Skechers will pay $40 million to settle charges that it deceived U.S. consumers with advertising for its toning shoes, including Shape Ups, Resistance Runners, Toners, and Tone Ups. Customers who bought these toning shoes will be eligible for refunds from the $40 million settlement fund either directly from the FTC or through a court-approved class action lawsuit. An additional $5 million settlement is being made with state Attorney Generals. David Vladeck, Director of the FTC's Bureau of Consumer Protection said "Skechers' unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health. The FTC's message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims."
The FTC took exception to the "Shape Up While You Walk," and "Get in Shape without Setting Foot in a Gym" messages from Skechers, the fact that an endorsement from a chiropractor was not disclosed as "paid," or that the chiropractor was married to a Skechers marketing executive. Skechers also cherry picked results from its clinical studies supporting the claims made in its ads. Finally, the products were hawked by two celebrities, Kim Kardashian, who starred in a risqué Skechers Super Bowl ad and another Dancing with the Stars alum Brooke Burke, whose promotional videos were linked to the FTC press release. Although it entered the market after Reebok, Skechers was the market leader in the $1 billion toning shoes category, with share of 48%.
In contrast, Reebok, which made Easy Tone and Run Tone shoes and apparel, settled with the FTC for $25 million in September 2011. In a statement to CNBC, Reebok said "We stand behind our EasyTone technology - the first shoe in the toning category that was inspired by balance-ball training. Settling does not mean we agree with the FTC's allegations; we do not. We have received overwhelmingly enthusiastic feedback from thousands of EasyTone customers, and we remain committed to the further development of our EasyTone line of products."
Reebok's website had some of the settlement items on sale, whereas several settlement items on Skechers' site were on clearance, selling at 20-40% off. New Balance, a smaller player in the field, now sells its toning walking shoes without any additional claims.
I owned a pair of New Balance 850, which had a flat sole instead of the convex soles of Reebok and Skechers. Although I never lost any weight (and I didn't expect to), I could tell they worked differently, making my leg muscles work harder and causing discomfort and fatigue similar to a workout. When it came to shaping and toning, I suppose they did work the same way high heeled shoes do, but were more comfortable to walk in.
The settlement amount, in my estimation, was less than 10% of the annual sales of Skechers Shape Ups and Tone Ups shoes. To me, these settlements are about overhyped advertising claims much more than they are about product performance. The FTC has previously chided consumer companies like General Mills for insufficiently backing up their health claims. In 2007, it fined several "weight loss in a bottle of pills" companies, including EFX, CortiSlim, TrimSpa, and One-A-Day WeightSmart for deceptive advertising. The FTC typically has no issue with "aspirational" product ads, say Victoria's Secret lingerie, which show supermodels with impossible bodies, or "puffery" like Axe deodorants, which show average males becoming chick magnets after using Axe products. What it took an exception to was Skechers implying that simply buying their shoes would make a consumer look like Kim Kardashian or Brooke Burke, without having to hit the gym (or the cosmetic surgeon's office), something that I believe should be obvious to all consumers.
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