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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