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FTC: Skechers deceived consumers with shoe ads |
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Written by JENNIFER C. KERR, Associated Press
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Wednesday, 16 May 2012 15:42 |
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WASHINGTON (AP) — The government wants you to know that simply sporting a pair of Skechers' fitness shoes is not going to get you Kim Kardashian's curves or Brooke Burke's toned tush.
Skechers USA Inc. will pay $40 million to settle charges by the Federal Trade Commission that the footwear company made unfounded claims that its Shape-ups shoes would help people lose weight and strengthen their butt, leg and stomach muscles. Kardashian, Burke and other celebrities endorsed the shoes in Skechers ads.
Wednesday's settlement also involves the company's Resistance Runner, Toners, and Tone-ups shoes and claims of deceptive advertising for those shoes as well.
Consumers who bought the shoes would be eligible for refunds, though it's not clear how much money they'll get. The FTC says that will depend on how many claims are received in the eight-month filing period. Buyers can go to the FTC website to file a claim.
Most of the $40 million federal settlement would be returned to consumers, but a small amount of the settlement would be used to administer the payouts.
The settlement is related to a broader agreement also announced Wednesday that resolves a multi-state investigation led by the attorneys general from Tennessee and Ohio and involving more than 40 states. The company will provide an additional $5 million to the states, and pay $5 million in class-action attorney fees.
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Abercrombie 1Q profit tumbles on higher costs |
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Written by By Associated Press
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Wednesday, 16 May 2012 11:21 |
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NEW ALBANY, Ohio (AP) — Abercrombie & Fitch Co. said Wednesday its first-quarter net income shrank 88 percent because of higher costs and declining sales in established stores and in Europe. The teen retailer's shares sank 12 percent to a new 52-week low in morning trading.
For the quarter ended April 28, the New Albany, Ohio-based retailer earned $3 million, or 3 cents per share, down from $25.1 million, or 28 cents per share, a year ago. Analysts polled by FactSet expected a profit of 2 cents per share.
Revenue rose 10 percent to $921.2 million from $836.7 million, but fell short of average analysts' predictions of $951.1 million.
U.S. revenue rose 1 percent to $644.3 million, while international revenue jumped 42 percent to $277 million. Revenue for sales that went straight to shoppers, such as sales from the company's websites, rose 40 percent to $148.2 million.
But revenue at stores open at least a year fell 5 percent, with a 4 percent drop at the company's namesake stores, an 11 percent decline at abercrombie kids stores and a 5 percent drop at Hollister stores. The metric is a key measure of a retailer's health, because it excludes sales at stores open at least a year.
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Subaru expanding Indiana plant to increase production |
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Written by By Associated Press
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Wednesday, 16 May 2012 11:25 |
LAFAYETTE, Ind. (AP) — Subaru plans a $75 million expansion of its central Indiana factory in order to increase production of its Outback and Legacy models.
Company executives announced plans for the project Wednesday at the factory near Lafayette, saying they expected to add up to 100 jobs over the next two years at the plant where about 3,600 people now work.
Subaru says the expansion will allow the factory to build 180,000 vehicles a year without overtime work, an increase of about 24,000 vehicles.
Subaru of Indiana executive vice president Tom Easterday says the expansion is needed to meet increased North American demand.
The Lafayette factory opened in 1989 and produces Legacy, Outback and Tribeca models for Subaru along with Toyota Camrys.
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Information from: Journal and Courier, http://www.jconline.com
Copyright 2012 The Associated Press.
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Stocks higher on housing but Europe worries linger |
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Written by PALLAVI GOGOI, AP Business Writer
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Wednesday, 16 May 2012 11:15 |
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NEW YORK (AP) — Hopes that the U.S. housing market is starting to recover and the economy is on the mend sent stocks higher on Wall Street.
But the gains are being constricted from continuing worries that Greece's political deadlock could fracture the European Union and roil global markets.
The Dow Jones industrial average rose 75 points Wednesday to 12,707. The Standard & Poor's 500 added nine points to 1,340. The Nasdaq composite rose 15 points to 2,908.
Home builder stocks rose after the Commerce Department said builders started work on new homes at an annual pace of 717,000 last month, 2.6 percent more than in March. It was a heartening sign for the beleaguered housing market, which seems to be forming a bottom and starting to recover. Construction rose for both single-family homes and apartments.
Target Corp. rose after a strong earnings report. Target said revenue at stores opened at least a year rose 5.3 percent, the strongest performance in six years for that period. Target's results illustrate that Americans are beginning to spend cautiously as economic uncertainty persists. Though the job market is still shaky, falling gas prices have given shoppers hope.
As signs of a global economic slowdown persist, prices of commodities have come off highs. Oil prices continued their march downwards from $105 in the beginning of the month to $93. Crude oil prices were down $1 on Wednesday. Gold prices fell $18 to $1539, the lowest level since December.
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