Remember Crocs? The maker of stubby foam sandals is bouncing back from the fashion abyss. To investors, Crocs’ recent climb from penny-stock territory, where it dipped in 2008, to the roughly $16 a share it trades at today, is a true miracle resurrection. To fashionistas, on the other hand, the revamp of Crocs—after the fad for its plastic sandals ﬁnally died out 3½ years ago—probably sounds like the footwear equivalent of a zombie attack.
It was only five years ago that the company’s famous clogs could be spotted virtually anywhere, from suburban shopping malls through Hollywood circles to the White House, as even then-president George W. Bush was seen donning the ultimate fashion aberration: Crocs with socks. Crocs debuted as a public company in 2006, raising US$223 million, at about $14 a share. By mid-2007, it hit US$75 a share. But that was the peak—and then came the crash.
By 2009 the obituaries were being penned. The fad had faded; the stock plummeted to a low of US$0.79 a share, and the company was drowning in high inventories and debt. There was talk of bankruptcy, and investors wrote off Crocs as another one-hit wonder, like mood rings and those children’s shoes with built-in wheels.
A couple of years later, though, the shoemaker has not only survived, it is thriving. “This is not the same business that was out there in 2007,” says Brian Sozzi, an analyst at Wall Street Strategies, a stock market research company. Key to the rebirth, says Sozzi, was diversification. The company is going strong in both Europe and Asia, which now account for 36 per cent of revenues. Crocs has also stepped up direct sales to consumers, shifting the focus from mall kiosks to online sales and stand-alone stores. And, crucially, it has moved beyond the clogs.
“Crocs at one point was synonymous with one specific style of shoe,” says Doug Hayes, vice-president and general manager of Americas at Crocs. It now boasts over 250 new styles, from sneakers to winter boots and even women’s flats. That has also allowed the company to broaden its pricing range, says Hayes—Crocs boat shoes, for example, sell for US$89.99 on the Internet, compared to US$29.99 for a pair of classic Crocs.
The non-clog models still incorporate the company’s trademark material: Croslite, a proprietary resin that absorbs odours and adapts to the shape of feet. The rubber was patented by Foam Creations, a Quebec company that Crocs bought in 2004. The difference now is that Crocs shoes are “a little bit more fashion-centric rather than eccentric,” says Marshal Cohen, chief industry analyst at NPD, a retail market research group. It’s part of a three-pronged approach, he explains. The Colorado-based shoemaker, he says, is using its new styles to offer more variety to Crocs fans, and woo the holdouts who shunned it at first. But Crocs will also continue to rely on its traditional sandals, which are popular among kids, and professionals like chefs and nurses who spend the day on their feet. The plastic sandals market, says Hayes, remains “very, very healthy.” Despite the new look, it seems, there will never be a Crocs without clogs.