Ugly Shoes As Economic Indicator: Crocs In Trouble
Here's the problem with Crocs. You either love them or you can't stand them. You make fun of them mercilessly, or you can't imagine a more comfortable shoe. What's problematic for the company that makes Crocs is that they don't really wear out...and who needs multiple pair of glorified garden clogs in a recession?
Crocs came about in the brief economic boom earlier this decade and had a wonderfully successful run, but now the eponymous company that makes them is in trouble.
The company had expanded to meet demand, but financially pressed customers cut back. Last year the company lost $185.1 million, slashed roughly 2,000 jobs and scrambled to find money to pay down millions in debt. Now it's stuck with a surplus of shoes, and its auditors have wondered if it can stay afloat. It has until the end of September to pay off its debt.
"The company's toast," said Damon Vickers, who manages an investment fund at Nine Points Capital Partners in Seattle. "They're zombie-ish. They're dead and they don't know it."
...
The story of Crocs mirrors the country's tale of economic expansion and contraction. At the height of the real estate market, in 2006, the company sold shares to the public, raising more than $200 million in the biggest stock offering in shoe history. It ramped up manufacturing to keep up with demand, only to then find that shoppers were snapping their wallets shut.
That's the problem with making a durable, sturdy product, kids. Remember that if you want to launch your own shoe company. Self-destructing is the way to go!
Once-Trendy Crocs Could Be on Their Last Legs [Washington Post] (Thanks, Peg!)
(Photo: ashi)
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Count me in as one of the people who make fun of them mercilessly.
This is what happens when people get their business management experience at Shoe Carnival. The fad that was crocs was not an unending gravy train. Perhaps wearers of crocs became so spiritually motivated by their fancy footwear that they went to a hardware store...and were embarrassed to see their shoes on sale there for $4.99.
It's possible to grow too big, too fast. Here's another example of that...and god, I hope their employees can find new jobs as soon as possible.
Love mine. Quality products.
Hope they can keep their head above water.
Not all crocs are hideous... I have a pair of croc flip-flop sandals with fabric uppers that I adore, and people are amazed when I show them that they are crocs. "But those are so cute and crocs are so ugly!" - I hear that all the time.
If I had more money I would probably buy more pairs!
So they borrowed money to fund their expansion? Add them to every other broken company that was making a good amount in sales, got greedy, and found themselves in trouble after they borrowed money to expand.
I think the other aspect is that they became a fad and, like all fads, sales drop once the fad is over.
I come down on both sides of the fence. Croc's are dorky looking, but they definitely have a useful place in the workplace - hence admiral_stabbin seeing them in a hardware store. I wear them when I work in the studio, as a vegetarian, airy clog.
Croc's arent' going to go away, even if the original manufacturer is having problems. They're something entirely too useful and too much of their own category to ever disappear. At least I hope so, I need them.
One quick aside: Croc's don't last forever. I first bought a couple of pairs in 2002 or 3, an early adopter after being impressed with their possibility as a messy studio shoe. The first pairs I bought lasted a long while before the tread wore off, after that first quality batch I've noticed the tread life decrease dramatically in the newer pairs I've bought. This wound up with me breaking a toe when I stepped on a wet street and slipped in a crappy smooth bottomed Croc.
Boating shoe? Not at all.
They need to hire a lobbying firm to get more escalators installed across the country. Then more shoes will get shredded and people will have to replace them.
I think what killed them was the idea that they needed their own stores. That would kill most quality footwear manufacturers.
I love my crocs. They're really comfortable, wear out slowly, and are simple to clean (run under water). I have heard of them breaking though. I know a kid who used to do just about all of his outside activities in them; e.g., hiking, and said that the straps tended to break.
They're really comfortable?
Oh. So that explains it.
Ambitious, sure, but greedy? That would make every company that ever borrows any money greedy. Namely, nearly every single company in existence.
BAIL-OUT! BAIL-OUT! BAIL-OUT!
Come on everyone, say it with me.
BAIL-OUT!
People really do love these crazy shoes. It's Mario Batali's "thing". He has a wonderful (imo) restaurant in LA called Mozza and framed outside the door are a pair of orange Crocs. I really don't like to be reminded of feet when I'm about to partake of a great (expensive) meal.
Well, they had a good run, but they should resolve themselves to just being a pair of cheap shoes you can find at a gas station. Then they may stay afloat, but will probably never be the powerhouse they once were for that one year.
If my deity was on sale for $4.99 I would be dis-illusioned too.
I guess that is why Christian Science does not like members reselling books. How horrible to find your spiritual life marked for 25 cents in a yard sale!
/tongue-in-cheek
@catskyfire: Right, and that happens even in a strong economy.
I wonder if the company recognized that Crocs were a fad and had a plan to deal with the sales drop. I wouldn't fault them for not having a plan for the entire economy imploding -- how do you plan for that? -- but if they didn't even think about going out of fashion, that's not very bright.
Crocs: Coming soon to a Ross or Marshall's near you!
So sort of like sweat suits I guess. What was it Seinfeld said about them to George? Something like "it's what you wear when you've given up & at least want to be comfortable".
@Shoelace: Yeah, the straps didn't really last more than a month or two on my "off-road" Crocs. But they seem to function perfectly well without them.
I hate the way they look, but dammit they are comfy. I have a pair of generic ones that I wear all the time around the house and yard. I was utterly aghast at myself when I accidentally wore them to the grocery store one day. I realized it when I was getting out of the car and actually got back in the car, drove home changed shoes and then drove back simply so that no one could see me in them.
Crocs (and their numerous copies) may not wear out, but kids grow out of them like crazy. My two girls have gone through at least 6 pairs in the last 18 months.
I'd never wear them, but I like them for my kids. They make great, easily cleanable outdoor and beach shoes and are great to stash in the car or stroller for emergencies (like lost, forgotten, or badly soiled shoes or forgotten socks).
I tried them and I haven't found them comfortable at all. The things that hold the straps on dig into your feet. I know many people who have gotten blisters from them (genuine crocs). I would be miserable if I had to wear these shoes, not to mention they are ugly.
What killed this is that you can buy generic ones for 75% of the price. Most adults probably bought one pair and they are lasting forever. People were buying original crocs for their kids but then they realized their kids grow out of a $30 pair of sandals rather quickly, so off to walmart for the generic less than $10 pair. I haven't seen a kid with genuine crocs in a long time, but the fakes are abundant.
@catskyfire: Crocs as they are might be a fad, but they had to be prepared that snarky Brunos in the fashion racket would call shenanigans on them - after all, wearing clothes for more than one *season*??
I find it surprising how many people like them despite all the escalator horror stories. I personally prefer flip-flops myself.
I saw Crocs at Ollie's Bargain Outlet (a closeout store) already for a few bucks. Even thought about picking some up.
Good fucking riddance with those toe-gringers and arch-saggers.
Guess I'm gonna have to stock up... maybe one more pair to last me the rest of my life.
I'm glad the plastic clown shoe fad is over and dead! What morons thinking this shit was going to last a long time.
Love the lady at :38 saying she wears this crap, but not in public. :P
@yagisencho: They borrowed money so they could make more shoes and to increase their total profits. Like Linen N Things, Circuit City and Eddie Bauer, they listened to the money guy who told them that they could make more money doing this than their debt payments would be.
If they had used their cash to slowly expand, they wouldn't be facing their current problems.
This would explain why they are constantly bombarding me with deals and free shipping promos and whatnot in my e-mail. They never used to have deals.
That's the only reason I bought my leather "real shoe"-looking Crocs (the Venture model). I like them a lot -now-, but I wouldn't have taken the risk at full price. Because they don't sell any of their models besides the original "Beach" in B&M stores (that I've seen), I couldn't try them on first. That might be one of their problems, I don't know.
@CumaeanSibyl: Hey, they did think of what to do before the fad ended - they went public. Doubtlessly the guys who started the company have gotten theirs already and now the fallout is just their employees and investors. Time to party like it's 1999!
For someone with bad feet and circulation, I would be sorely disappointed to see the end of Crocs. Yes, they are not the most attractive shoe on earth, but I can actually walk without any pain in them. And for me that's a rare thing when it comes to shoes.
The reason Crocs is in trouble has nothing to do with "sturdiness." Crocs are faddish, and fads always die.
@twophrasebark: A lot of nurses wear them. They're apparently dead comfortable for a 12-hour shift on your feet the whole time, AND they can be cleaned easily -- even boiled if you need to.
(They're also popular for little kids because they're cheap, kids can put them on themselves, and they wash easy.)
@sean98125: They were short sighted and foolish. They make a fad product that quickly developed a stigma around the brand name. Even if they expanded into other types of shoes everyone still ties Crocks with the ugly rubber clogs.
If your business plan is based on the assumption that people will continue to buy your product in increasing numbers with nothing but hope to back it up you deserve to go out of business.
@jaya9581: i get people saying that to me all the time when i'm wearing my croc adara sandals. they're so cute and nobody ever believes that they're crocs!
I have three pairs of Crocs, none of which are the 'ugly' kind. The Athena flip-flops are good-looking and have a lot of grip. The Malindi flats are super comfortable and I wear them several times a week. Plus, the other kinds come in 'normal' colors like black and brown instead of fuschia and orange!
If the company is resurrected, they will have a niche market; nurses and waitresses love them.
Dear Crocs,
LOWER THE PRICE.
Love, Me.
@jaya9581:
Oh, me too. I bought a pair of their regular shoes (leather uppers, Croc-o-lite or whatever they call it inside)to wear to work and they are GREAT. They look like little Mary Jane shoes and no one would know they are Crocs.
I also got a pair of the insoles and they are very comfortable.
I have two "uglies" and one nice shoe kind. Plus the insoles which are AMAZING.
I like the flip flops but I couldn't afford another pair.
Adorable and practical for little kids (even little ones can easily put them on themselves), ridiculous on adults.
I think they would make a fantastic third-world intervention invention. They could probably boost themselves by seeing if they can donate or sell them cheaply as aid. When you donate to a community that needs simple things like shoes, I would assume that going with a product that is robust like the Croc would be ideal... especially since most villages lack escalators.
At one point, a single store in my family's company sold 100,000 pair of Crocs in 12 months. Oh yeah, the population of the city was only 120,000.
Fortunately, they jumped off 2 years ago when they saw customer service slip and they knew the popularity of a blown-rubber product wouldn't last forever. Duh. The stock price going from 65 to 5 before the rest of the market crashed wasn't a good sign, either.
My friend works as an intern for Crocs on Notre Dame's campus. He organizes events like the Croc Fashion Show. About a year ago the position went from paid to unpaid, but he still gets a lot of merchandise to use around campus.