Crocs, Inc.: Selling Ugly for Billions

Crocs are ugly. Soooo ugly. They are the quintessential, ugly, embarrassing “dad shoes” that make teenage daughters cringe and shadow their face with their hand, except this time everyone is cringing. It wouldn’t be surprising if years later we discover that Crocs was just a secret ploy by UGG to take the negative attention off of their brand. Why else would these clog-monsters be created?

Well, ugly is ugly, but as much as people claim to hate Crocs the company is squeaking its bulgy, awkward feet up in the market. Even with their signature bloated, plastic sock with holes raking-in 47 percent of revenue, the company is apparently becoming just as embarrassed as we are by their trademark footwear that they’re putting it in the back of their stores to make way for new styles and ramping-up product development. The result so far has been optimistic: $1.12 billion in sales last year and trading around $16 a share (up from a disastrous mark of less than $1 a share in 2008).

Part of the recent success is because to the brand’s expansion in the Asian market (41 percent of its 2012 sales was in the Asian pacific), specifically China, where the company estimates to generate over $100 million in revenue this year. Its other big Asian market is Japan and with 60 stores already opened in Thailand the company is setting sights high there as well. Unfortunately consumers in Asian markets are none-the-wiser to the American hatred of Crocs. More unfortunate is that they can’t develop the aesthetic realization on their own.

Without the benefit of a blank slate in the US, Crocs is trying to pull their colorful, goofy clogs up from holding the company underwater (albeit they are waterproof) and kick them off – that is, separate the brand name “Crocs” from the ugly shoe that everyone refers to as Crocs. In a bold yet necessary move for growth, the company is pushing its symbol of outdoor comfort and assured bachelorism to the backburner (can it just be pushed onto a burner instead?). For investors the question now is not of fashion but of whether or not to buy shares. For the company, the question now is not whether or not consumers will continue to think their signature model is ugly (they will), it’s whether or not they’ll think the new stuff is ugly too.

PS. Have you seen these heinous Crocs loafers?


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