The fangs are cool again. But the back story of the shoe company is more than a simple fashion declaration.
The emblematic hoof was a basic food food in the early 2000s. However, the brand's profitability was eroded in the years that followed the great recession when it was fighting to develop internationally. From 2008 to 2016, four years ago when the operating room of the company was negative, according to Factseet data.
CEO of Crocs, Andrew Rees, took the lead in 2017 and managed its recovery strategy.
“When I joined the company, we refreshed the management team, we updated the strategy, and it was really a question of reaching profitability. But also by putting the right level of marketing and product innovation in the product so that we can create an additional request,” said Rees.
Crocs has teamed up with brands ranging from Balenciaga to Pixar, and celebrities like Justin Bieber and Post Malone, to create limited edition versions. The pandemic also created the demand for comfortable shoes among consumers who were stuck at home with leading health professionals.
From 2020 to 2021, the brand increased its revenues by around 1.4 billion dollars to around $ 2.3 billion. Profitability has also flipped, while the crocs operating margin increased from 17.2% to 29.8% during the same period, according to FostSet data.
Regarding its brand, Crocs has moved its messaging and started to embrace criticism surrounding its colorful and unique appearance.
“They returned to their original hoof and essentially used it as canvas for self -expression“” said Annie Wilson, lecturer in marketing at Wharton school. “The most important thing I saw from the point of view of messaging was their passage to try to convince consumers that it was comfort and function, to say essentially:” Yes, we know that we are ugly, but that is why you should love us, because this is what makes us a nature and unique. “”
Crocs strongly relied on personalization through its decorative charms known as Jibbitz. The company told CNBC that Jibbitz returned was $ 271 million in 2024, which represents a little more than 8% of the brand's income.
“They are very profitable, but the most important part is not only the direct contribution of profits, but just to engage with this consumer to really bring them back to the brand again and again,” said the president of the Crocs brand Anne Mehlman.
Crocs said that around 75% of its consumers buy Jibbitz to accessorize their hooves, according to its owner surveys.
While Crocs returned has increased in the past five years, he is now trying to develop another occasional shoe brand in his portfolio called Heydude, which he acquired in 2022 for 2.5 billion dollars on cash and stock contract.
The brand has seen sales decrease since its acquisition by Crocs and has been forced to pay nearly $ 1.9 million to customers in 2024 after facing the FTC allegations that it deleted negative criticism from its online product and unduly reimbursed customers.
In 2024, Heydude's revenues dropped by 13.2% compared to 2023, while Crocs climbed 8.8%.
“You make investments and you actually take the hard -won money from the Crocs brand, then submit it and invest it in Heydude,” said Adrienne Yih, principal barclays, Adrienne Yih. “They think it's a good growth prospect. Right now, the jury is there.”
The Crocs brand is also faced with new 46% tariff winds that President Donald Trump imposed on Vietnam this week. The company indicated that a little more than half of its production had taken place in Vietnam since 2021.
