Skechers USA Inc. in a statement denied the allegations in the recent alleged shareholder class actions as frivolous and malicious, and plans on defending them vigorously.
On October 20, 2017, the Steamfitters Local 449 Pension Plan filed a securities class action – on behalf of itself and purportedly other shareholders who purchased Skechers stock during a five-month period in 2015—against the company and certain of its officers, in the United States District Court for the Southern District of New York, case number 1:17-cv-08107.
The lawsuit alleges that, between April 23 and October 22, 2015, the company made materially false statements or omissions of material fact about the anticipated performance of its domestic wholesale business segment and asserts claims for unspecified damages, attorneys’ fees, and equitable relief based on alleged violations of federal securities laws.
The lawsuit was filed against the company and two of its officers by Labaton Sucharow LLP, but the company has become aware of a copy-cat complaint and other plaintiffs’ lawyers posting internet “shareholder alerts” of “investigations.”
David Weinberg, Skechers chief financial officer, commented:
“These lawsuits are frivolous, coming two years after the fact and immediately after we reported a new quarterly sales record for the third quarter of 2017. Further, the allegations are about the third quarter of 2015, which at the time was a quarterly net sales record for the company, and both the earnings from operations and net earnings for the same period in 2015 were an impressive increase over the prior year. The lawsuit, at best, shows a complete misunderstanding of both our business and the footwear industry and, at worse and as the timing suggests, shows it was brought to distract investors, the industry, and consumers from our record third quarter 2017 earnings, announced one day before the lawsuit was filed. (See referenced third quarter 2017 earnings announcement). It is ironic that this lawsuit was filed the day after we announced three consecutive record quarters in 2017, which followed annual record net sales in 2016. Our record net sales in both 2016 and 2017, as well as that of 2015, are a testament to the power and continuing strength of our global brand. These lawsuits are without merit, and we will be vehemently defending the company and our officers in court.”
Skechers is being represented in the lawsuit by Daniel Petrocelli, Seth Aronson, Jeffrey Barker, and Abby Rudzin of O’Melveny & Myers in New York and Los Angeles.
