Wal-Mart has settled the latest trademark-infringement lawsuit brought by Adidas accusing it of selling sneakers that were confusingly similar with its three-stripe design. The two parties asked that the suit be dismissed on Aug. 29, two months before it was to go to trial. Terms of the settlement were not disclosed. It is the third time in 13 years that Wal-Mart has settled a stripe-infringement lawsuit by Adidas. The previous two times were in 1996 and 2002. Kmart already settled a similar case with Adidas a few weeks ago, just after a jury imposed on Payless ShoeSource to pay $304.6 million to Adidas over a similar case.
Trademark-infringement suits was costly for Collective Brands in the quarter ended Aug. 2, with net income down by 66.8 percent to $8.2 million after $36.2 million in pre-tax charges to pay Adidas and settle with K-Swiss. Sales were brighter, up by 30.4 percent to $911.7 million including a 0.2 percent increase in sales on a comparable-store basis and also including the addition of Stride Rite. Without the charges from the litigation, net income would have been up by 35 percent to $33.6 million (more in Shoe Intelligence).