Foot Locker reports (impressive) second-quarter earnings & Skechers sued over sketchy model dealings

As previously reported, there are a few retailers showing signs of financial growth and stability, even in a tough economy. One of the more surprising was that of Footlocker Inc., which recently released its second-quarter earnings to show an impressive $37 million dollar profit. This makes the sixth consecutive quarter of positive growth for the athletic apparel and footwear retailer. A year prior, the company's second-quarter earnings showed only $6 million in profit.

"Our associates worldwide are doing an excellent job executing the initiatives of our strategic plan," said Ken C. Hicks, chairman and chief executive officer of Foot Locker, Inc., in a statement. "As a result, we were able to deliver strong sales and profit results in the second quarter, including a comparable store sales gain of 11.8 percent and earnings of 24 cents per share. The results over this longer time period encourage us to believe that we have the right strategies in place to create shareholder value on a sustained basis."

Since the top of the year, the company opened 35 new stores, remodeled/relocated 95 stores and closed 54 stores. At the end of July 2011, the company operated 3,407 stores in 22 countries in North America, Europe, Australia, and New Zealand. In addition, 25 franchised stores were operating in the Middle East and South Korea.

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A $10 million dollar lawsuit was filed in Los Angeles Superior Court against Skechers USA Inc. by a group of models accusing the company of failing to pay for the use and global distribution of pictures of said models modeling the company's footwear.

"Skechers paid a small sum of money for only limited use of these images, for a limited amount of time," said David Shraga via statement, a lawyer from the Los Angeles firm Kawahito Shraga & Westrick, who is representing the 11 models. "Then it disregarded these limitations and embarked on a successful worldwide branding campaign that was built around the images of these young models."

The complaint alleges that Skechers "took advantage" of the models who would find it difficult to "discover the wrongdoing," since the majority of the ads ran in foreign countries.

The models are seeking compensatory and punitive damages. "The models are seeking no less than $10 million in compensation for Skechers' misappropriation of their likenesses," said the news release from Kawahito Shraga & Westrick.

A Skechers spokeswoman had no comment, stating the company does not comment on litigation.

This is the second lawsuit against the company to makes waves this year. The first was made by a woman who claimed the company's "Shape-Up" footwear caused her hip fractures.

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