Crocs shoes turnaround showing results
By Daniel Tyson
17:00, 15 September 2021
Plastic sandal company Crocs will introduce new products and rely heavily on online sales to keep one step ahead in the increasingly crowded footwear market, company leaders told investors Tuesday.
Wall Street apparently approves of the company’s decision. In mid-day trading Wednesday, the company’s stock was up 2.13% to $152.93 (£109.87) per share. By comparison Nike, a global leader in footwear, was down 1.5% to $156.23.
Competition everywhere
Crocs hit the market nearly two decades ago and consumers either loved or hated the shoes. In recent years, the market has expanded earlier with cheaper knock-offs and more recently with footwear aimed towards Crocs’ targeted market of young, active, and trendy consumers.
Competition was fierce and took over some of Crocs’ market share. Canadian-based Natives signed deals with Nordstrom and has a large online presence. Natives shoes sell for a fraction of the price of Crocs.
By 2014, Crocs, of Broomfield, Colorado, felt shoehorned and realized they needed new products to appeal to broader market. At the time, the company’s stock was trading below $15.
Action Plan
Company leaders focused on comfort, value and self-expression and online sales, company leaders said in a nearly 3-hour video for investors.
At first, they focused on selling in five countries: the US, Japan, China, South Korea and Germany. Now, the company sells in 80-plus nations, the company said.
Casual comfort
Crocs’ President Michelle Poole said while the company has increased it value, it is still focused on new products to help attract customers. Recently, the company branched out beyond plastic sandals into four additional footwear areas: athletic and leisure shoes, women's flats, rain boots and other items.
Additionally, the company expanded into apparel, such as t-shirts and socks.
Poole said that Crocs will continue to emphasize sandals.
Digital ambition
Digital marketing wide growth margins and has helped fuel the company's ambitious goals.
Crocs hopes to generate more than $2.5bn in online sales by 2026 that would amount to about half of the company's projected revenue, said Adam Michaels, chief digital officer.
Between 2019 and Q2 2021, Crocs' online sales grew by more than 53% from about $300m to $700m.
The return
Since focusing on those elements, Croc sales and revenue have shot up. Shareholder value increased to $7.7bn, an 870% return, said Crocs CEO Andrew Rees.
Crocs expects to see a 17% CAGR by 2025, bringing it to $5bn, Ross said.