The Federal Trade Commission (FTC) is cracking down on false advertising claims, and toning shoes have been its latest target. Back in September, Reebok had to pay $25 million in refunds to consumers for making false claims about the benefits of its so-called toning shoes.
Skechers is next up for scrutiny, and the company is bracing itself for having to make a large payout. Footwear News reports that the FTC and agencies in other countries are still investigating claims made by the company about its ShapeUps toning shoes. And even Skechers acknowledges that it may be in trouble. Skechers said in a statement, "Based on discussions with the FTC staff, the company does not believe that the FTC’s pending inquiry into the company’s toning products will likely end in a closure letter assuring no further regulatory action."
Analysts agree that Skechers is probably screwed, based on the settlement that Reebok had to pay. Skechers' toning business was more than twice the size of Reebok's in 2009-2010 (the years in question), so industry analysts predict that the company may have to cough up as much as $50 million to $75 million to consumers in refunds. Yikes. Skechers is going to fight the investigations and try to defend its advertising claims, but it isn't looking good for them. Basically, if you made toning shoes a few years ago, it sucks to be you. According to analysts, "Toning is a tough category to be in. Anyone who quantified benefits of toning product is going to be [fair game for the FTC]."