L.A. Gear Accuses Newsletter of Libel

Make no mistake about it: L.A. Gear doesn’t like being called “L.A. Rear.” And it hates being called “L.A. Disappear.”

Those unflattering nicknames were cited in a libel suit that L.A. Gear filed Wednesday in Los Angeles County Superior Court against the publishers of the newsletter Sporting Goods Intelligence and its editor, John Horan.

The suit accuses the defendants of damaging L.A. Gear’s relations with retailers by wrongly reporting in August that the Marina Del Rey sneaker firm “sold heavily to diverters” during its fiscal third quarter.

Diverters are regular-price retailers that sell their merchandise to discounters rather than at their own stores, often without the supplier’s knowledge. The diversion, by making more goods available at discount outlets, can make it harder for other regular-price retailers to compete.

L.A. Gear said it actually has been trying to thwart diversions and has not knowingly sold any merchandise to diverters. The company said it sells only older product lines to discounters.

But as a result of the Sporting Goods Intelligence article, L.A. Gear said it is losing out on sales to retailers that are wary of competition from discounters. The company is seeking unspecified actual and punitive damages.

Where do the nicknames come in? L.A. Gear’s lawyers say they reflect Horan’s “state of mind.” They note that Sporting Goods Intelligence for years has called the firm “L.A. Rear”--apparently a reference to some of its sexier advertising--portraying the firm “in a negative light.”

Even more galling to the firm was a Sept. 12 story calling it “L.A. Disappear.”

“John Horan may think he’s being pithy, but it reflects an attitude. He takes liberties with the name calling,” said John J. Quinn, an L.A. Gear attorney. He said the names imply that Horan “doesn’t take the company seriously, so you shouldn’t take the company seriously.”

L.A. Gear’s profits have fallen in the last two quarters, but its sales continue to grow and it remains the nation’s No. 3 sneaker firm.

Horan declined to comment, saying neither he nor his lawyer has seen the suit. Sporting Goods Intelligence, published three times a month, is based in Glen Mills, Pa.