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Skechers’ Lesson From a Fad That Flopped

It learns how to avoid getting clobbered by boom-and-bust styles
A woman walks past a Skechers store in Seoul on March 23, 2013.

A woman walks past a Skechers store in Seoul on March 23, 2013.

Photographer: SeongJoon Cho/Bloomberg

Five years ago, Skechers’ Shape-ups shoes were the runaway leaders in “toning,” a new category of sneaker that promised to help wearers slim down and strengthen their butt muscles. Toning-shoe sales grew more than twentyfold in only three years, from $50 million in 2008 to a peak of $1.1 billion in 2010, according to researcher SportsOneSource. Skechers owned about 60 percent of the market, and roughly a third of its $2 billion in revenue that year came from toning.

In February 2011 the company ran an ad during the Super Bowl showing Kim Kardashian bidding farewell to her personal trainer in favor of a pair of Shape-ups. By then, however, the shoes were quickly moving from fad to fiasco. Customers were increasingly buying Shape-ups at a discount, and millions of pairs sat unsold because Skechers had overordered. “There’s just too much inventory,” Chief Operating Officer David Weinberg told investors on an earnings call 10 days after the Super Bowl ad ran. It didn’t help that the Federal Trade Commission soon began investigating Skechers and its rivals for false advertising about such shoes’ health benefits. In May 2012 the company denied wrongdoing but agreed to pay the FTC $40 million to settle charges that it had deceived customers, and it was barred from making unsupported claims about weight loss and strengthening.