Nike (NKE 1.38%) has a beef with some of Skechers' (SKX 17.05%) shoe designs.
According to a court filing reported on by Bloomberg Law, Nike alleges that Skechers CEO Robert Greenberg encourages employees to copy competitors' designs to gain market share. Skechers contends, though, that it only draws inspiration from the competition, a practice it calls "Skecherizing." Nike may have a point here, but it may be less of a problem for Skechers than investors might think.
Air Max, Skech-Air -- let's not call the whole thing off
Nike is specifically calling out Skechers for copying its Air Max shoe (which, by the way, has been available for sale since 1987) and the more recently introduced VaporMax. In case you're not up to date on the latest in sneaker fashion, Air Max are Nike shoes with the air pockets in the heels. VaporMax is also an air cushioning system, but it's distributed across the whole length of the shoe, giving the sole a bubble-like appearance.
Women's Skechers Skech-Air. Image source: Skechers.
Skechers, for its part, has been selling a particular line of performance shoes called Skech-Air. There is plenty of variety in the mix -- in the Skech-Air lineup and in the company's other shoes -- but some of the styles do look similar to some of the Air Max and VaporMax options over at Nike.
As with all things court-related, this case could take many months or years to play out and finally be resolved. Shoes are shoes, after all, and though design and branding are important, the burden will be on Nike to prove that Skechers' shoes are more than just similar in appearance.
Men's Skechers Skech-Air. Image source: Skechers.
Nike might be right, but...
This legal spat is really nothing new. Skechers has been the quirky but scrappy discount brand for quite some time. Although in recent years it has begun to elevate its profile with running and golfing shoes, as well as its "chunky sneaker" D'Lites brand (which it has been marketing with various pop artist endorsement deals), Skechers still generally goes the value route. Even its athlete sponsorships typically revolve around retired professionals rather than active athlete names like LeBron James and Kevin Durant at Nike. Over the summer of 2019, for example, Skechers announced a collaboration with Shaquille O'Neal for its foray into basketball shoes, initial focus being placed on basketball kicks for kids.
Image source: Getty Images.
Besides, this isn't the first time Skechers has found itself in legal crosshairs. Adidas (ADDYY 1.26%) filed multiple patent infringements against Skechers back in 2015, only being awarded partial victory in 2018 (Skechers and a myriad of other shoemakers using a four-stripe design was ruled as not infringing on Adidas' three-stripe one). Nike also brought a suit against Skechers in 2016 for Skechers' Flex sneakers.
But it's not just Skechers that gets criticized. In the mid-2000s, Adidas won a suit against Nike for selling two-striped shoes in Europe. The two were also in a spat over knit running shoes a few years ago. Even maligned Skechers filed a case against Steve Madden in 2016 for infringement on some of its designs.
Long story short, the shoe business is a touchy one. Lawsuits are common. Designs (not logos) get imitated and commoditized. Nike founder Phil Knight is famous for saying "Business is war without bullets." Shots are being fired, but it's no reason to get worried that Nike is about to squash Skechers.
Besides, the underdog shoemaker is gaining ground -- especially internationally -- because of its sneaker designs that it sells at a discount to the competition. It's been a winning strategy unlikely to get derailed by a court decision in the U.S. on a couple of shoes that might look similar to each other.
