The crocodiles are great again. But the return story of the footwear company is more than a fashion statement.
Iconic obstruction was a basic fashion element in the early 2000s. However, the profitability of the brand was eroded in the years after the great recession, since it fought to expand internationally. From 2008 to 2016, there were four years in which the company’s operational margin was negative, according to FACTSET data.
The CEO of Crocs, Andrew Rees, took the crocs rudder in 2017 and headed its response strategy.
“When I joined the company, we updated the management team, we refresh the strategy, and that was really about reaching profitability. But also put the correct level of marketing and product innovation in the product so that we could create an incremental demand,” Rees said.
Crocs associated with brands ranging from Balenciaga to Pixar, and celebrities such as Justin Bieber and Post Malone, to create limited editing releases. Pandemia also created a comfortable footwear demand among consumers who were trapped at home along with first -line medical professionals.
From 2020 to 2021, the brand increased its income of around $ 1.4 billion to approximately $ 2.3 billion. Profitability also shot, since the operating margin of Crocs increased from 17.2% to 29.8% during the same period of time, according to Factset data.
With respect to his brand, Crocs changed his messages and began adopting criticism that surrounds his colorful and unique appearance.
“They returned to their original obstruction and basically used it as a canvas for self -expression“ Annie Wilson, Marketing Professor at the Wharton school, said. “The most important thing I saw from a messaging perspective was his change to try to convince consumers that it was comfort and function, basically say: ‘Yes, we know that we are ugly, but that is why you should love us, because that is what makes us a kind of type and unique'”.
Crocs leaned strongly to customization through his decorative charms known as Jibbitz. The company told CNBC that Jibbitz’s revenues were $ 271 million in 2024, which represents just over 8% of brand’s revenues.
“They are very profitable, but the most important part is not only the contribution of direct profits, but just commit to that consumer to take them back to the brand again and again,” said Crocs brand president Anne Mehlman.
Crocs said that about 75% of their consumers buy Jibbitz to customize their obstructions, according to their patented surveys.
Although Crocs’s income has increased in the last five years, it is now trying to grow another casual footwear brand in its portfolio called Heydude, which acquired in 2022 for $ 2.5 billion in an agreement in cash and active.
The brand has seen a decrease in sales since its acquisition by CROCS, and was forced to pay almost $ 1.9 million to customers in 2024 after facing the FTC accusations that suppressed the negative reviews of its product online and with incorrectly reimbursed customers.
In 2024, Heydude’s income fell 13.2% compared to 2023, while Crocs rose 8.8%.
“Actually, he is making investments and is actually taking the money earned with so much effort of the Crocs brand, and then he is infusing and investing it in Heydude,” said Barclays senior retail analyst Adrienne Yih. “They think that is a good growth perspective. At this time, the jury is out of that.”
The Crocs brand also faces new winds against 46% of the rate that President Donald Trump imposed on Vietnam this week. The company reported that just over half of its production has taken place in Vietnam since 2021.
