SKECHERS Comments on State of Business Following Buckingham Research Group Report

by | Sep 25, 2014 | Press Release

Sep 25, 2014 • 8:45 am EDT

MANHATTAN BEACH, Calif.–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE:SKX) released a short statement on the state of its business in response to The Buckingham Research Group (BRG) Industry Update report released on September 24, 2014, respecting the imminent close of the third quarter and the Company’s upcoming earnings announcement.

“We respect the SportScan data released every Wednesday on the footwear business, but when not looked at in its entirety or analyzed over periods of time, and understanding that some key accounts—including Amazon, Zappos, Kohl’s and Finish Line/Macy’s, are not currently reporting and are projected based on the balance of the sector, the data can be misinterpreted or skewed,” began David Weinberg, SKECHERS COO and CFO.

Mr. Weinberg continued: “As BRG reported, for the week ending September 20, 2014, SKECHERS sales were down 3 percent, but improved 19 percent for the trailing four weeks and 33 percent for the trailing 13 weeks. What BRG didn’t report is that the week ending September 30 is one of the three smallest weeks of the year, according to SportScan, who also indicated to us that their analysis of the data shows that we are continuing to take market share and that footwear retailers remain confident in our product.”

“With a deeper dive and channel checks conducted which is always recommended, the results would be more conclusive. As indicated by SportScan and our retail partners, we are continuing to take market share. We have seen only one material decrease in our kids business in one account in the South due to a significant planned decrease in the number of doors, though our business in the existing doors remains strong,” Weinberg added. “This is already the biggest booking third quarter in the history of the Company with an over 50 percent increase from third quarter of last year, and the SKECHERS retail stores continue to show positive comp store increases on top of significant retail store comp increases last year. Given channel checks, SKECHERS retail performance, our incoming order rate which leads us to an increased backlog worldwide, we remain confident that our domestic and international business is strong, that our brand continues to be in demand, and that our product and marketing resonate with consumers around the world.”

Additional reports issued on September 24, 2014 about SKECHERS market position included the following statements:

Sterne Agee
Business is healthy as evidenced by high teens ASP increase:The deceleration in the last week was largely relegated to the mid-tier department store channel, where SKX sales declined 20.5% in the last week versus +10.4% for the last 4 weeks. We do not believe there is a brand/product issue here, as shown by the 19% ASP increase within the channel. If there was a product/brand issue, department stores would be promoting the product in a very aggressive fashion. We believe that retailers likely ran out of inventory after the strong start of back to school.We remind investors that in recent quarters, SKX management has put a great emphasis on lean inventory levels and “starving the customer.” The deceleration in the mid-tier department store channel was even greater for the EPS overall footwear category, where sales declined 23% in the last week versus +2% for the last 4 weeks.

Susquehanna Financial Group, LLLP
Skechers Demand is Outstripping Supply. With the devil in the details, we noticed overall units were down -20.2% while ASPs were up +21.1% this week. We believe this signals that retailers are short inventory following a strong back-to-school season (BTS). Recall BTS (7/20-9/13) saw stronger than expected growth (+36.5%) and given the likely lack of product thereafter, this likely accentuated the historically normal fall-off in sales post-BTS that the brand usually experiences. Importantly, this is supported by our conversations with key retailers, SportScan and SKX. As a reminder, we note that SportScan only tracks ~25% of SKX global sales, in which we believe the other 75% is trending very well, particularly international. Overall, we believe the story is very much on track.

Citi Research
By category, SportScan data indicates that Skechers continued to post positive growth in the walking, work/utility, training/fitness, boots, and sandal categories, while casual athletic posted a -5% decline and dress/comfort casual was also weaker. By channel, SKX continued to post positive growth in all major channels ex-Mid-Tier Department Stores, with Family Footwear up +6%, Discount/Mass +66%, and Athletic Specialty/Sporting Goods up +15% y/y.

While Wunderlich did not issue a report, the firm’sanalyst Danielle McCoy was quoted in Investor’s Business Daily on September 24, 2014 as follows: “’We don’t think this is worrisome. I believe Skechers is still a very solid brand — one of the key winners this back-to-school season.’ McCoy said that comparing the most recent week to the trailing four weeks ‘is not comparable,’ since August is the largest back-to-school selling month.”

About SKECHERS USA, Inc.

SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of lifestyle footwear for men, women and children, as well as performance footwear for men and women. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, and in over 100 countries and territories through the Company’s international network of subsidiaries in Canada, Brazil, Chile, Japan, and across Europe, as well as through joint ventures in Asia and distributors around the world. For more information, please visit www.skechers.com, and follow us on Facebook (www.facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s future growth, financial results and operations, its development of new products, future demand for its products and growth opportunities, its planned opening of new stores, advertising and marketing initiatives, and the expansion and automation plans for the Company’s European Distribution Center. Forward-looking statements can be identified by the use of forward looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will be,” “will continue,” “will result,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the resignation of the Company’s former independent registered public accounting firm, and its withdrawal of its audit reports with respect to certain of the Company’s historical financial statements; international, national and local general economic, political and market conditions including the ongoing global economic slowdown and market instability; entry into the highly competitive performance footwear market; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers, decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2013, and its Form 10-Q for the quarter ended March 31, 2014. The risks included here are not exhaustive.The Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time and the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

SKECHERS USA, Inc.
Company Contact:
Jenn Clay, 310-318-3100
or
Investor Relations:
Andrew Greenebaum, 310-829-5400

SKECHERS Announces Preliminary Settlement of Derivative Litigation

by | Sep 19, 2014 | Press Release

Sep 19, 2014 • 10:02 pm EDT

NOTICE OF PROPOSED SETTLEMENT OF DERIVATIVE ACTION

TO:ANY OWNER OF SKECHERS U.S.A., INC.’S (“SKECHERS”) COMMON STOCK

YOU ARE HEREBY NOTIFIED that pursuant to an Order of the United States District Court for the Central District of California, Western Division, a hearing will be held on November 10, 2014, at 1:30p.m., before the Honorable Philip S. Gutierrez, United States District Judge, United States Courthouse, Courtroom 880, Edward R. Roybal Federal Building, 255 East Temple Street, Los Angeles, CA, 90012, for the purpose of determining whether the Proposed Settlement in the above captioned derivative action (the “Derivative Action”) should be approved as fair, reasonable and adequate, and whether a judgment dismissing the Derivative Action should be entered. Plaintiff is a Skechers shareholder who filed certain claims against the nine members of Skechers’ Board of Directors and a former Skechers employee on behalf and in the right of Skechers. In connection with the Settlement, Skechers has agreed to adopt certain corporate governance procedures, and Defendants are being released from liability to Skechers. While continuing to deny all allegations of wrongdoing or liability whatsoever, Individual Defendants have agreed to the Settlement to eliminate the expense, risks, and uncertain outcome of the litigation. As part of the Settlement, Plaintiff will request payment of up to $350,000 for Plaintiff’s Counsels’ fees and expenses and Plaintiff’s incentive award. Plaintiff’s requests are subject to the Court’s approval and will be paid by Defendants directly or through their insurer the amount approved by the Court.

IF YOU ARE A CURRENT OWNER OF SKECHERS COMMON STOCK YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THE DERIVATIVE ACTION.

A more detailed form of notice describing the Settlement is available on the websites of Hynes Keller & Hernandez, LLC, www.hkh-lawfirm.com, and Faruqi & Faruqi, LLP, www.faruqilaw.com.

You can object to the Settlement if you dislike any part of it, or if you disagree with Plaintiff’s Counsel’s request for attorneys’ fees and expenses or Plaintiff’s request for an incentive award. The Court will consider your views. To object, you must file with the Court and send to the parties’ counsel a signed letter or other written submission saying that you object to the Settlement in Basaraba v. Greenberg, et al., Case NO. CV-13-05061-PSG (SHx). Be sure to include: (i) your name, address, email address, and telephone number; (ii) how many Skechers shares you owned as of January 1, 2008, whether you still own those shares, and the initial purchase date of your shares; (iii) a detailed description of your specific objections to any matter before the Court, and all the grounds for your objections to the Settlement, including any documents you wish the Court to consider; and (iv) your most recent brokerage account statement evidencing current ownership of your Skechers shares and account statements evidencing continuing ownership from January 1, 2008, through the date of the Settlement Hearing. If you want to appear at the Settlement Hearing, you must also state your intention to appear and provide the names of all witnesses, if any, you wish to present at the hearing, along with a statement of the matters on which such witnesses will testify and a summary of their proposed testimony. The objection and any supporting papers must be filed with the Court, by hand, mail, or overnight delivery, and received by Plaintiff’s Counsel and Individual Defendants’ and Skechers’ Counsel, by hand, mail, overnight delivery, fax, or email, at the addresses provided below no later than October 27, 2014.

FARUQI & FARUQI, LLP
DAVID E. BOWER
10866 Wilshire Boulevard, Suite 1470
Los Angeles, CA 90024
Fax: (310) 461-1427
[email protected]

HYNES KELLER & HERNANDEZ, LLC
MICHAEL J. HYNES
1150 First Avenue, Suite 501
King of Prussia, PA 19406
Fax: (914) 752-3041
[email protected]

Attorneys for Plaintiff Gloria Basaraba

O’MELVENY & MYERS LLP
SETH ARONSON
400 South Hope Street
Los Angeles, CA 90071
Fax: (213) 430-6407
[email protected]

Attorney for Defendants Robert Greenberg, Michael Greenberg, Jeffrey Greenberg, David Weinberg, Richard Siskind, Geyer Kosinski, Morton Erlich, Richard A. Rappaport, and Thomas Walsh

SHEPPARD MULLIN RICHTER & HAMPTON, LLP
KENNETH A. O’BRIEN, JR.
333 South Hope Street, 43rd Floor
Los Angeles, CA 90071
Fax: (213) 620-1398
[email protected]

Attorney for Nominal Defendant Skechers U.S.A., Inc.

CLERK OF THE COURT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
255 East Temple Street
Los Angeles, CA 90012

PLEASE DO NOT CONTACT THE COURT OR THE CLERK OF THE COURT REGARDING THIS NOTICE.

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s future growth, financial results and operations, its development of new products, future demand for its products and growth opportunities, its planned opening of new stores, advertising and marketing initiatives, and the expansion and automation plans for the Company’s European Distribution Center. Forward-looking statements can be identified by the use of forward looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will be,” “will continue,” “will result,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the resignation of the Company’s former independent registered public accounting firm, and its withdrawal of its audit reports with respect to certain of the Company’s historical financial statements; international, national and local general economic, political and market conditions including the ongoing global economic slowdown and market instability; entry into the highly competitive performance footwear market; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers, decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2013, and its Form 10-Q for the quarter ended June 30, 2014. The risks included here are not exhaustive.The Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time and the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

SKECHERS USA, Inc.
David Weinberg
Chief Operating Officer
Chief Financial Officer
310-318-3100
or
Investor Relations:
Andrew Greenebaum
310-829-5400

SKECHERS USA, Inc. Sues DB Shoe Company for Infringing on Its SKECHERS GO WALK® Footwear Line

by | Sep 17, 2014 | Press Release

Sep 17, 2014 • 9:00 am EDT

MANHATTAN BEACH, Calif.–(BUSINESS WIRE)– SKECHERS USA, Inc. (NYSE:SKX), a global leader in the lifestyle and performance footwear industry, today announced that it filed a lawsuit against DB Shoe Company, LLC, a California-based retailer, for selling footwear that infringes on the popular SKECHERS GO WALK® product line.

The suit, filed in the United States District Court for the Central District of California, seeks compensatory and punitive damages as well as injunctive relief for infringing on seven separate design patents of SKECHERS. The suit states that DB Shoe Company is selling the infringing products under the name SUPER DREAM WALK 816.

“SKECHERS has invested tremendous resources into designing, developing, and advertising our SKECHERS GO WALK® product line. We have built SKECHERS GO WALK® into a name and look globally recognized and synonymous with SKECHERS, which benefits not only SKECHERS but all of its retail partners,” stated David Weinberg, Chief Operating Officer of SKECHERS. “We will not allow our competitors and retailers to infringe on one of our most valuable intellectual properties, and we will continue to enforce our intellectual property rights against any company that develops footwear that infringes on the designs of SKECHERS GO WALK® as well as our other proprietary product lines.”

SKECHERS is being represented in the suit by Marshall Lerner of Kleinberg and Lerner in Los Angeles.

ABOUT SKECHERS USA, INC.
SKECHERS USA, Inc. (NYSE:SKX), based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under the SKECHERS name. SKECHERS footwear is available in the United States via department and specialty stores, company-owned SKECHERS retail stores and its e-commerce website, and over 100 countries and territories through the company’s global network of distributors and subsidiaries in Brazil, Canada, Chile, Japan and across Europe, as well as through joint ventures in Asia. For more information, please visit www.skechers.com and follow us on Facebook (Facebook.com/SKECHERS) and Twitter (Twitter.com/SKECHERSUSA).

This announcement contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s future growth, financial results and operations, its development of new products, future demand for its products and growth opportunities, and its planned opening of new stores, advertising and marketing initiatives. Forward-looking statements can be identified by the use of forward-looking language such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will be,” “will continue,” “will result,” “could,” “may,” “might,” or any variations of such words with similar meanings. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements. Factors that might cause or contribute to such differences include the resignation of the Company’s former independent registered public accounting firm, and its withdrawal of its audit reports with respect to certain of the Company’s historical financial statements; international, national and local general economic, political and market conditions including the ongoing global economic slowdown and market instability; consumer preferences and rapid changes in technology in the highly competitive performance footwear market; sustaining, managing and forecasting costs and proper inventory levels; losing any significant customers, decreased demand by industry retailers and cancellation of order commitments due to the lack of popularity of particular designs and/or categories of products; maintaining brand image and intense competition among sellers of footwear for consumers; anticipating, identifying, interpreting or forecasting changes in fashion trends, consumer demand for the products and the various market factors described above; sales levels during the spring, back-to-school and holiday selling seasons; and other factors referenced or incorporated by reference in the Company’s annual report on Form 10-K for the year ended December 31, 2013 and its quarterly report on Form 10-Q for the three months endedJune 30, 2014. The risks included here are not exhaustive.The Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time and the companies cannot predict all such risk factors, nor can the companies assess the impact of all such risk factors on their respective businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Moreover, reported results should not be considered an indication of future performance.

SKECHERS USA, Inc.
Jennifer Clay, 310-937-1326