1065837--3/5/2010--SKECHERS_USA

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{operation, international, foreign}

{customer, product, revenue}

{condition, economic, financial}

{product, market, service}

{acquisition, growth, future}

{stock, price, operating}

{competitive, industry, competition}

{cost, regulation, environmental}

{property, intellectual, protect}

{operation, natural, condition}

{personnel, key, retain}

{loan, real, estate}

{cost, operation, labor}

We Have Recently Entered The Highly Competitive Performance Footwear Market. Our Operating Results Could Be Negatively Impacted If Our Sales Are Concentrated In Any One Style Or Group Of Styles. Our Business And The Success Of Our Products Could Be Harmed If We Are Unable To Maintain Our Brand Image. It Is Difficult To Predict The Effect Of Regulatory Inquiries About Advertising And Promotional Claims Related To Our Products In The Walking Footwear Fitness Market. We Face Intense Competition, Including Competition From Companies With Significantly Greater Resources Than Ours, And If We Are Unable To Compete Effectively With These Companies, Our Market Share May Decline And Our Business Could Be Harmed. Our Business Could Be Harmed If We Fail To Maintain Proper Inventory Levels. Our Future Success Depends On Our Ability To Respond To Changing Consumer Demands, Identify And Interpret Fashion Trends And Successfully Market New Products. Our Business Could Be Adversely Affected By Changes In The Business Or Financial Condition Of Significant Customers Due To The Ongoing Conditions In The Global Financial Markets. We May Have Difficulty Managing Our Costs As A Result Of The Ongoing Global Economic Slowdown. We May Be Unable To Successfully Execute Our Growth Strategy Or Maintain Our Growth. Our Business And Operating Results Could Be Negatively Impacted If Our New Domestic Distribution Center Is Not Completed As Expected In 2011. Our Children s Shoe Business May Be Negatively Impacted By The Consumer Product Safety Improvement Act Of 2008. We Depend Upon A Relatively Small Group Of Customers For A Large Portion Of Our Sales. Many Of Our Retail Stores Depend Heavily On The Customer Traffic Generated By Shopping And Factory Outlet Malls Or By Tourism. Our International Sales And Manufacturing Operations Are Subject To The Risks Of Doing Business Abroad, Particularly In China, Which Could Affect Our Ability To Sell Or Manufacture Our Products In International Markets, Obtain Products From Foreign Suppliers Or Control The Costs Of Our Products. Currency Exchange Rate Fluctuations In China Could Result In Higher Costs And Decreased Margins. The Potential Imposition Of Additional Duties, Quotas, Tariffs And Other Trade Restrictions Could Have An Adverse Impact On Our Sales And Profitability. Our Quarterly Revenues And Operating Results Fluctuate As A Result Of A Variety Of Factors, Including Seasonal Fluctuations In Demand For Footwear, Delivery Date Delays And Potential Fluctuations In Our Annualized Tax Rate, Which May Result In Volatility Of Our Stock Price. We Rely On Independent Contract Manufacturers And, As A Result, Are Exposed To Potential Disruptions In Product Supply. Our Business Could Be Harmed If Our Contract Manufacturers, Suppliers Or Licensees Violate Labor, Trade Or Other Laws. Our Strategies Involve A Number Of Risks That Could Prevent Or Delay Any Successful Opening Of New Stores As Well As Impact The Performance Of Our Existing Stores. We Depend On Key Personnel To Manage Our Business Effectively In A Rapidly Changing Market, And If We Are Unable To Retain Existing Personnel, Our Business Could Be Harmed. The Disruption, Expense And Potential Liability Associated With Existing And Unanticipated Future Litigation Against Us Could Have A Material Adverse Effect On Our Business, Results Of Operations And Financial Condition. Our Ability To Compete Could Be Jeopardized If We Are Unable To Protect Our Intellectual Property Rights Or If We Are Sued For Intellectual Property Infringement. Natural Disasters Or A Decline In Economic Conditions In California Could Increase Our Operating Expenses Or Adversely Affect Our Sales Revenue. One Principal Stockholder Is Able To Exert Significant Influence Over All Matters Requiring A Vote Of Our Stockholders And His Interests May Differ From The Interests Of Our Other Stockholders.

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1065837--3/5/2010--SKECHERS_USA_INC