Crocs, perhaps the most polarising shoe of our time, is making a comeback.
The company’s signature foam clog fell out of favour a decade ago, but now it is a star reborn on Twitter and beyond: On the runway, in the pages of Vogue and on feet of people who feel a little funny about it but can no longer resist.
The turnaround is no accident, analysts say, but rather the result of four years of strategic changes, following a $US200 million ($250 million) investment by private-equity giant Blackstone Group in 2013.
Since then, Crocs has closed hundreds of underperforming stores, done away with unpopular styles and shifted its focus back to its classic foam clog, which sells for about $45 and accounts for nearly half of the company’s sales.
“The classic clog has re-emerged as our hero,” said Terence Reilly, chief marketing officer of Crocs. “Certainly in 2017, there’s been a resurgence.”
Annual sales have exceeded $US1 billion for six consecutive years, and profits rose 54 per cent in the most recent quarter. Analysts say there are signs that the company is reaching new customers again.
During America’s back-to-school season, Crocs stores had a 12 per cent increase in foot traffic, marking the largest jump among national retailers, according to inMarket, a California-based firm that collected data from 50 million customers to come up with the results.
“Crocs is starting to turn itself around, even in these very difficult times,” said Steven Marotta, an analyst for CL King & Associates. “This is a company that has successfully gone back to the basics.”
The company has sold more than 300 million pairs of shoes to date. Crocs now come covered in glitter and emblazoned with Minnie Mouse, Spider-Man and Batman.
The company – which markets its shoes as slip-resistant and easy to clean – has also found a niche among medical and restaurant workers. Its Bistro line, for example, includes clogs covered with eggs and bacon, sushi and chili.
“New colours and prints are selling well,” its new chief executive Andrew Rees said in an earnings call last month. “We’re striking the right balance of comfort and style, and consumers are responding favourably.”
But that doesn’t mean it’s been an easy slog for Crocs, which has weathered its share of hard times. In March, the company announced it would close 160 stores and bring on a new chief executive after posting a $US44.5 million fourth-quarter loss.
Ugly is beautiful
In recent quarters, the company has become profitable again. Crocs has also benefited, analysts say, from a larger trend toward comfortable – and even ugly – shoes.
Tevas, Uggs and Birkenstocks are all enjoying a resurgence, as shoppers eschew high heels in favour of less glamorous footwear.
And, analysts said, it probably doesn’t hurt that celebrities like the actress Drew Barrymore and wrestler John Cena have signed on as spokespeople.
Crocs have also made three appearances at London Fashion Week in the past year – most recently on Monday, when designer Christopher Kane outfitted models in rhinestone-encrusted Crocs.
“Now that consumers have gotten very comfortable wearing their athleisure gear, they want to be comfortable all the time,” said Beth Goldstein, a footwear analyst for research firm NPD Group. “At the same time, [Crocs are] now a classic, and classic is cool.”
Crocs, founded 15 years ago in the US state of Colorado, originally marketed its signature clog as a boating shoe.The company found fast success in the early 2000s. Among its customers: Former president George W. Bush, actor Al Pacino and former model Brooke Shields.
But by 2008, Crocs had hit hard times. The country was in recession, and sales plunged. The company lost $US185.1 million that year, and laid off roughly 2,000 workers.
Back from the dead
“The company’s toast,” Damon Vickers, who manages an investment fund at Nine Points Capital Partners, told The Washington Post in 2009. “They’re zombie-ish. They’re dead and they don’t know it.”
But, it seems, Crocs have come back from the dead.
Company executives recently began noticing that people were buying a dozen pairs of clogs at a time, all in the same colour. It turned out, they said, that high school and college sporting teams were buying them to wear before and after competitions.
Many of those students had worn Crocs as children, and were now rediscovering them.
“Whether or not they’re actually cool – well, that’s up for debate,” said Cameron Peebles, chief marketing officer of inMarket.
“But our data shows that they’re popular again, especially with the back-to-school crowd.”
The Washington Post