Briefs: Pay raises at Wal-Mart shrink its bottom line; Petco prepares to go public

Weinberg says that after Shape-ups, the company learned to avoid spikes in inventory through weekly monitoring of retail sales. “We just watch more; we have more controls,” he says. Skechers also now has the clout with manufacturers to add or reduce capacity more quickly, he says. Shape-ups, in his eyes, were a black swan: a brand-new category for an industry that usually deals in variations on old themes. Nobody knew how big it would get. “While we did learn from it,” Weinberg says, “we are still a very aggressive company.”

Skechers is now the No. 1 brand for walking shoes in America and is seeing brisk sales for its kids, comfort, and work footwear. The brand tops Adidas and Under Armour in athletic shoes in the U.S., according to NPD Group, and sits a distant second to Nike.

Skechers was born from the wreckage of L.A. Gear, the sneaker brand that rose with the aerobics shoes trend, only to collapse in the early 1990s. L.A. Gear founder Robert Greenberg started Skechers in 1992 and remains chief executive officer. The Shape-ups misstep stoked fears that Skechers was a feast-or-famine brand as well. “You have some investors that say leopards don’t change their spots,” Poser says.

But this time the Skechers brand is thriving by offering dozens of mass- market versions of popular styles. In 2010, for example, Skechers introduced a line of alpargata-style canvas flats called Bobs and promised to donate a pair of shoes to needy children for every pair it sold. The name, the style, and the one-for-one giving borrowed directly from Toms, a startup founded in 2006 that has given away more than 35 million pairs of shoes. Weinberg says Skechers is shedding its copycat reputation. “We’ve done that in the past,” he says, “but we’ve become significantly more innovative over the last few years.” Whatever the origin, Skechers knows how to sell. “They’re the best at commercializing good ideas in the market place,” Powell says. “It’s not essential that you be first with an idea. You just need to be best.” —Ira Boudway The bottom line Skechers’ stock market valuation has risen from $600 million at the end of 2011 to about $8 billion today.

Briefs Paying Up at Wal-Mart

By Kyle Stock

ARE ARE

○H○ Raises are proving costly at Wal-Mart YOU YOU Stores. The retailer’s profit in its most recent quar- OVER OVER50? ter fell 15 percent, to $3.5 billion, and it lowered tar- You should buy You should buy something! somethin hing! gets for the current fiscal year weeks after it raised The AARP advocacy its minimum wage. Sales at U.S. stores open more group launched a marketing agency to than a year ticked up 1.5 percent in the period, help companies sell to consumers over though the company’s investments in e-commerce 50 years old, a demographic it says has weighed on results. ○ ○ Petco Holdings filed to been overlooked by Madison Avenue. sell shares publicly almost 10 years after it was taken off the stock market in a $1.7billion private equity buyThe number of alleged out. Last year the company made adulterers outed online about a month after a $75 million profit on $4 billion in hackers claimed to have stolen data from the website AshleyMadison.com, 36m sales, according to the prospectus. Comparable sales among which facilitates trysts. Petco’s 1,400 stores have risen for 21 consecutive quarters as Americans increasingly pamper their dogs and cats. ○ ○ Comcast’s NBCUniversal spent $200 million for a stake in BuzzFeed in a deal that valued the new-media platform at $1.5 billion. Days earlier the media empire cut a similar deal with Vox Media, a BuzzFeed competitor. ○s○ Sprint said it would scrap two-year cell phone contracts by the end of the year in favor of a model in which consumers lease handsets, rather than buy them at subsidized rates. Its “iPhone Forever” plan offers the newest version of Apple’s phone for $22 a month. Verizon Communi- CEO cations made a similar shift earlier this month. Wisdom AT&T remains the only major U.S. carrier to offer subsidized smartphone purchases. “I don’t think any ○Å○ Sprout Pharmaceuticals became the company adopting the approach portrayed the ed first company to win Food and Drug Admin- could survive, much less thrive, , istration approval for a pill designed to boost in today’s highly competitive tech y ch women’s libido. Dubbed Addyi, but popularly hiring market.” Amazon.com CEO ” EO referred to as “Viagra for women,” the pill can Jeff Bezos responding to a New have a host of serious side effects, including York Times article criticizing his company’s low blood pressure and nausea. pressurized culture

Scott Walker goes hog

wild for Harley 29

Always Within Reach ¡Aun en Nicaragua! August 24 — August 30, 2015 25

A Florida Medicare provider looks overseas for a new way to bilk American taxpayers “You will hardly recover anything of the funds you paid out”

On the streets of Managua, the shuttle bus wrapped in a giant ad for free health care stood out. “Medicare for people living abroad,” it proclaimed above the image of a cheerful older woman playing golf. But Medicare, the American public health insurance program for the elderly and disabled, isn’t available in Nicaragua or anywhere outside the U.S., except in emergency circumstances. The clinic advertised, Nostrum Medical Center, had a way around that: Patients were required to provide a U.S. address, so their visits could be billed to American taxpayers.

Before the Nicaraguan scheme and a related one in the Dominican Republic were shut down last fall, the U.S. government paid out $25 million from 2011 to 2014 for medical care received by more than 1,000 foreign residents who signed up using post office boxes, mailforwarding services, or the addresses of friends or relatives in Florida to conceal that they lived overseas. “We were a little bit astonished by the brazenness of the conspirators in this case, particularly with their widespread and open marketing,” says Shimon Richmond, the special agent in charge of the Miami regional office of the inspector general of the U.S. Department of Health and Human Services (HHS), which oversaw the investigation.

Ten people, including a Managua physician and his son, have pleaded guilty in the swindle; one remains at large. Four conspirators, including two executives at Florida Healthcare Plus, one of the companies that billed Medicare for the patients seen abroad, will be sentenced in Miami on Aug. 27. (Florida Healthcare wasn’t accused of wrongdoing.) The investigation is ongoing, with the HHS inspector general, the FBI, and the U.S. Department of State looking at other countries where Medicare scammers are recruiting patients.

The foreign-enrollment dodge is a new twist on Medicare fraud, which costs American taxpayers billions of dollars a year, according to FBI estimates. For years, the Centers for Medicare and Medicaid Services (CMS), which administers Medicare, had relied on the payand-chase method, paying claims first and going after those that looked suspicious after the fact. Recently, the government has increased efforts to boost detection before cheaters can start collecting reimbursements for falsified bills. Ramped-up screening under the Affordable Care Act has resulted in the revocation of Medicare billing privileges for about 34,000 providers, says Medicare spokesman Tony Salters. “CMS is strongly committed to protecting the integrity of the Medicare program,”