Executive Briefings

Crocs' Billion Dollar Strategy: Stay Ugly

Crocs, perhaps the most polarizing shoe of our time, is making a comeback.

The company's signature foam clog fell out of favor 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 $200m investment by private-equity giant Blackstone Group in 2013. Since then, Crocs has closed hundreds of under performing stores, done away with unpopular styles and shifted its focus back to its classic foam clog, which sells for about $35 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 $1bn for six consecutive years, and profits rose 54 percent in the most recent quarter. Analysts say there are signs that the company is reaching new customers again. During back-to-school season, Crocs stores had a 12 percent 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.

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The company's signature foam clog fell out of favor 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 $200m investment by private-equity giant Blackstone Group in 2013. Since then, Crocs has closed hundreds of under performing stores, done away with unpopular styles and shifted its focus back to its classic foam clog, which sells for about $35 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 $1bn for six consecutive years, and profits rose 54 percent in the most recent quarter. Analysts say there are signs that the company is reaching new customers again. During back-to-school season, Crocs stores had a 12 percent 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.

Read Full Article