If you thought the road to a better backside ran through funny-shaped shoes, the Federal Trade Commission has some news for you.
Reebok International Ltd., a unit of Adidas AG, agreed to pay $25 million in customer refunds to settle charges of false advertising brought by the FTC over the shoemaker's claim that its "toning shoes" could work better than normal footwear to whip muscles into shape.
Reebok blasted back at the FTC. "We stand behind our EasyTone technology," the company said. "Settling does not mean we agree with the FTC's allegations; we do not." Reebok will continue to sell the products at issue in the settlement, but will market them differently, a spokesman said.
At the center of the settlement were the company's claims that its RunTone sneakers tone and strengthen legs more than a regular running shoe, and that its EasyTone brand produces 28% more muscle tone in the glutes and 11% more muscle tone in the calf and hamstring than a regular sneaker.
Its TV commercials featured women with shapely legs prancing around in the shoes while doing everyday activities such as walking, vacuuming, browsing a bookshelf and cooking.The FTC complaint was a shot across the bow for Skechers USA Inc. and other sellers of similar shoes that claim body parts can be shaped up via ordinary walking around. Such shoes were one of the footwear industry's smash hits, generating more than $1 billion in revenue last year though sales have slowed this year.
"The FTC wants national advertisers to understand that they must exercise some responsibility and ensure that their claims for fitness gear are supported by sound science," said David Vladeck, director of the FTC's bureau of consumer protection.
The agency has been cracking down over the past year on companies that make health-related claims for their products, says Jaime Bianchi, partner in the commercial litigation practice at White & Case LLP. He says the agency has been most aggressive in going after food and drink companies, but thinks other toning-shoe companies could be vulnerable to similar actions. Reebok spent $31.6 million advertising its EasyTone brand in 2010, and another $9.3 million in the first half of this year, according to Kantar Media, an ad-tracking unit of WPP PLC. Adidas said the settlement won't affect its profit forecast.
Larissa Bungo, a member of the FTC's case team, says the agency didn't find proof for Reebok's claims. "Marketers need to have proper substantiation for the claims they make before they make them," she says.
A precursor to toning footwear hit the scene in 1996, when a company called Masai Barefoot Technology released shoes it said would improve posture by causing "instability" when walking—much, it claimed, like walking barefoot. Toning products caught on with consumers over the past decade after companies including Skechers, Reebok and FitFlop released their own versions.Mary Lee Wagner of Fairfax, Va., bought into the craze four years ago, paying $230 for a pair of MBT sneakers. The 58-year-old wore the shoes religiously for six months with hopes of shaping up her thighs. "There was no difference whatsoever," she says.
She decided to give toning shoes another try after they went mainstream, reasoning that bigger companies had figured out a way to develop a more effective shoe. Two years ago, she bought a pair of Skechers Shape-ups for $75. After three months of use, she switched back to her $35 Ryka walking shoes. As for the toning-shoe experiment? "I won't be buying any more pairs," she said.
Skechers and MBT declined to comment. Skechers claims Shape-ups "may result in more toned leg and buttock muscles." To help build the buzz around the brand, it brought on reality starlet Kim Kardashian and highlighted her in a commercial during this year's Super Bowl. FitFlop says its footwear features a patent-pending "microwobbleboard" that can "increase bottom muscle activation (up to 30% longer)" and "increase hamstring muscle activation (up to 16% longer)." The closely held British company has sold more than 12 million pairs of flip-flops, sneakers, boots and other footwear since 2007.
It said it isn't involved in the FTC proceeding against Reebok and has tested its claims in the laboratory. Reebok has 42% of the market for toning footware, second behind market leader Skechers, which has a 48% share, according to marketing and research firm SportsONESource. Sales of toning shoes in the U.S. jumped from $100 million in 2008 to a peak of $1.1 billion in 2010, according SportsONESource. The total is expected to fall to $650 million this year.
The shoes have been falling out of favor this year, causing companies to slash their prices to pare back excess inventory. Skechers said it "aggressively reduced" its inventories of the shoes in the second quarter, selling two million pairs of Shape-ups at a loss of $21 million.
Nevertheless, companies continue to roll them out. In its second-quarter report, Adidas identified the Reebok EasyTone Plus footwear as a major product launch for the third quarter.
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