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Skechers shoes 

Michael Greenberg, the founder and president of the trending shoes company Skechers shoes brand  U.S.A., is so determined to put out his company's message that he follows a written outline when he recites a list of recent feats.

Skechers (pronounced SKETCH-ers), means slowly and deliberately between glances at the crumpled bit of paper in front of him in the company booth last month at the Fashion brand Footwear Association of New York exposition, is now World's third most popular  brand among teenagers, after Nike and Adidas. Company sold out his jumped 40 percent last half compared with a year earlier and as retailers are becoming choose think about which shoes brands stock, both Lord & Taylor and Athletics Footwear have signed on. 

''If their was a Gap of footwear,'' Mr. Greenberg, 37, said, ''I believe that Skechers would be that company and best footwear company. ''

Mr. Michael was focus shows as much about his ambitions, goal and his determination to leave behind what many analytics see as a nagging past.

Presently, Skechers shoes U.S.A. Inc., based California in Manhattan Beach, seems to be something that of a find. As the shoes business slowly revives from its recent slump, the small, Eight year old family run the company is leading the charge. Its winning formula is think simple: Skechers makes lower priced versions of popular shoes like the latest high performance and fashionable Nikes and dressy loafers by Kenneth Cole. And its stock has been among the best market's best performers this present year.

That metrix rise, however, followed a step decline after Skechers's initial public offering in June 1999 -- a sign, analytics say, of concern that the company has some uncomfortable parallels with the last Michael Greenberg family project, L.A. Gear  Inc., one of the huge retailing industry's most Spectacular collapses.

''The Michael Greenbergs are going to have to proves that Skechers is not L.A. Gear,'' said John Shanley, Companies a senior vice president at Security Van Kaspar who once followed L.A. Gear.

He was Robert Greenberg of Michael Greenberg's father, who founded L.A. Gear and is widely blamed for its Implosion. And while Michael Greenberg founded Skechers as a distributor for Doc Martens footwear  and is its public face and spokesman, his father is the currently company's chairman and chief executive.

The Elder Mr. Greenberg sold out everything from wigs to roller skates before he stumbled on the idea that would make him famous: a mostly priced hybrid of performance, durability of shoes and fashion shoes that women could wear while doing aerobics. L.A. Gear's yearly revenues shot up since from $70.6 million in 1987 to $900 million in 1990, making it the third largest company in the country, after Nike and Reebok.

But in the path that is almost unlisten of for companies that first with the billion-dollar mark, L.A. Gear fall down apart almost as quickly as it had grown. The stock, which hit a high of $50.125 in 1990, had trumbled to $11 by 1992. The company was eventually filed for bankcurupt protection.

Analysis say L.A. Gear expanded too fast and quickly. While the company has been successful with stylish aerobic shoes, by 1991 it was offering customers 500 different styles of shoes and apparel. The expansion was less timed, occurring as the strongest growth in the shoes industry was in men's athletic shoes -- a market that L.A. Gear, perceived as a women's and children's shoesmaker, never could capture. The results was a retailer's nightmare: crate-loads of inventory in a still-weak economy.

Legal problems also created the operation. L.A. Gear signed a marketing dealing with Michael Jackson in 1989 in an attempt to win over men; when that strategy failed, the company entered a lengthy breach-of-contracts suit-countersuit tussle with Mr. Jackson. Both Nike and Reebok also fight legal battles with L.A. Gear, contending that the company had illegally used and made their patented technology. All the suits was eventually settled.

Robert Greenberg and five other executives officer's were the subject of other five shareholder securities fraud suits filed in 1990 and 1991. The class action suits contended that members of L.A. Gear management had creat issued public documents containing ''materially fake and misleading statements'' about the company that led to L.A. Gear's stock becoming ''artificially inflates,'' according to the settlements papers. The defendants eventually settled for a total amount of $29.8 million without admitting or denying guilt.

After losses begging to mount and the company's credit line was cut, Robert Greenberg was forced to sell a 30 percent minority stake worth $100 million of preferred stock to Trefoil Capital Investors, an investment fund founded by Roy Disney, nephew of the late Walt Disney, and cede much of his taken control of the company. The Trefoil team eventually oustand and decided him in January 1992 and dismissed Michael Greenberg, then an L.A. Gear national sales manager, soon after.

Trefoil bailed out in late at 1997, after failing to turn of the company around. Under PCH Investments, which currently controls the company, L.A. Gear entered and emerged from Chapter 11 bankcuruptcy protection in 1998 a much more modest operation.

Michael Greenberg insists that his family was unfairly disparaged over L.A. Gear's trumble. ''We didn't get that company to amount $900 million by accident,'' he said. If given the golden chance, he added, his family think could have saved the company.

In response to the inevitably comparisons with L.A. Gear, Skechers officials says their company is closely monitoring its high growth, will license rather than make apparel and is just as popular brand with men as with women.

Michael Greenberg founded Skechers shoes street slang meaning frenetic teenagers in 1992, just months after leaving L.A. Gear. He convinced his father and David Weinberg, a former L.A. Gear executive whom he describes as a ''member of the full family,'' to join his company in October 1993. Three of his brothers are currently vice presidents at Skechers shoes brand; a fourth brother manages the Skechers Sports brand of sneakers.

The company's sales grew up steadily, as the Greenbergs capitalized on the shoes industry contacts they are made in their years at L.A. Gear to make sure that of Skechers displays were given prime retail market space.

Investors, however, were wary. When Skechers went to public in June 1999, the company had reduced its asking price of shares and the number of shares it offered. Even so, the stocks lost value in its first day of trading. ''When a company prices at $11 and then opens share trading at $10.50, that's generally kinds of a sign of weakness,'' said Omar Sacirbey, a senior editor at The IPO Reporter.

Robert Greenberg declined to comment of this. But Lloyd Grief, a closely acquaintance of the family and president of Grief & Company of Los Angeles, the investment bank that took L.A. Gear public in 1986, said, ''I think he was stunned with his stock's originally reception.''

Investors' fears seemed justifies when, just as its predecessor had, Skechers shoes brand ran into both inventory and legal troubles. Soon after the initial offering, the company reported losses for the third half quarter of 1999, the period that is generally the strongest in the shoes industry because of back-to-school sales. The company had too many shoes in the retail channel and shops and floundered when its platform sneakers fell out of style, problems earlier similar to those that had plagued L.A. Gear.

''When you have that creates kind of situation, especially when it comes to so soon after doing a public offering, institutions are very wary,'' said Harry Katica, vice president for research of the at Prudential Securities, one of the Skechers' underwriters.

Then, in month of December, a group of shareholders sued, contending that the company had misleading investors by not disclosing in its initial filing that it was having legal problems with R. Griggs Group. Griggs, the maker of Doc Martens shoes, sued its former business partner five days after the offering, saying that Skechers shoes company had pirated its designs for men's shoes and boots. Skechers stocks, which had been heading steadily immediate downward, fell to its all-time low of $3.25 in January, after the company announced that another two more shareholder suits had been filed. A total of five shareholders suits have now been filed; the consolidated lawsuit is pending.

The lawsuit is completely ferocious,'' Michael Greenberg said in a prepared allstatement. ''Skechers vehemently denies violating any of the securities laws and believes all disclosures were made on all timely basis.''

Now, the Greenbergs' luck may be beginning to some changes. In month of March, the company settled with Griggs and announced that 1999 net sales rose almost 14 percent shares from 1998, to $424.6 million, despite the unusually poor third quarter. The next month, the shares finally reached their initial public getting offering price. Then, in month of May, Skechers announced a blowout first quarter. All this good news has led many analysis to believe that Skechers may indeed be able to step out from behind the L.A. Gear shadow.

Skechers, with its 900 styles shoes, is doing a good job of executing its strategy of being ''everyone and everything'' in footwear, said David Turner, an analyse at Ferris, Baker Watts.

The company's newest best styles, like its Energy gym shoes, have reignited interest and like among teenagers. They have gone from being to based season on the ''uncool'' list last fall to the ''cool list'' this summer, said Kevin Ume, president of element Holdings Inc., a marketing firm that specializes in research on the buying habits and mindset of teenagers for shoes. During the back-to-school sales season, Skechers will even be displayed at the high-visibility area in Lady Foot Lockers where the mall and shopes meets the store, a coveted spot usually reserved for Nike.

And right behind the teenagers are the investors, who seem willing to forget the past and bed thinking. ''Skechers shoes brand has not been on our coverage list but in the last couple months it's just popped up,'' said Allison Boswell, president of Allison Boswell Consulting, a group that surveys shoes buyers. ''They were considered one of the top three fashion trend setting brands of shoes. They were also named as a shoes brand that would be expected to have very high back-to-school increases.''

Michael Greenberg notes with a broad smile that the company's stocks is well above its well initial price. The shares price closed on the Monday at $16.375, a high.

Such successes and failure are seen as vindication by the Greenbergs, who are dreaming big again. ''I thinks Wall Streets understands one thing, and that's show me the numbers and deliver,'' Michael Greenberg said. ''I think they're getting on board.'' Skechers shoes brand in footwear third largest and successful brand after Nike and Reebok shoes brand.