Skechers to pay $50M to settle advertising charges

WASHINGTON (MarketWatch) � Skechers USA Inc. will pay $50 million to resolve federal and state allegations that it deceived the public by making unfounded claims that its �toning shoes� would help consumers tone muscles and lose weight, under a settlement announced Wednesday.

The Federal Trade Commission challenged several Skechers SKX �ads as deceptive, including one in which the company urged consumers to �get in shape without setting foot in a gym.� It also objected to an ad Skechers ran during the 2011 Super Bowl featuring Kim Kardashian.

The agency said Skechers, a market leader for toning shoes, made unsupported claims that its products would provide more weight loss, muscle toning and strengthening than regular fitness shoes.

Consumers who bought the shoes will be eligible for refunds either directly from the FTC or through a court-approved class action lawsuit, the FTC said. Agency officials said the amount of the refunds will depend on the number of claims it receives.

Skechers, in a statement, vigorously denied the allegations but said it �could not ignore the exorbitant cost and endless distraction of several years spent defending multiple lawsuits in multiple courts across the country.�

The Manhattan Beach, Calif. company said it will pay $40 million under a settlement with the FTC, $5 million under a related deal with state attorneys general and $5 million in class-action attorneys� fees.

Under the terms of Wednesday�s FTC settlement, the shoemaker can�t make claims about the health benefits of its shoes unless they are backed by scientific evidence.

The FTC said one Skechers ad wrongly claimed the shoes� benefits were backed by an independent chiropractor study. In fact, the study did not produce the claimed results, and the chiropractor who conducted the study is married to a Skechers marketing executive, the agency said.

Reebok International Ltd., a unit of Adidas AG ADDYY � DE:ADS �, reached a similar settlement with the FTC last year, agreeing to pay $25 million in refunds.