these are crocs
and a lot of people think they're really
ugly
people who love to hate crocs had cause
to celebrate in 2008 when investors were
writing the company off as a passing fad
crocs lost over 185 million dollars that
year and cut about 2 000 jobs
the stock plunged to just over one
dollar a share from a high of about 69 a
year earlier but over the next decade
crocs would go on to sell over 700
million pairs of shoes worldwide
recently the clogs have been strutting
down runways at luxury fashion shows
celebrities like justin bieber ariana
grande and post malone are wearing the
shoes
it's a top brand among gen z
and limited edition crocs are selling
for hundreds of dollars on the resale
market
crocs have become a collector's item i
have two croc backpacks 20 pairs of
crocs five shirts and then my laptop is
filled with croc stickers
here's how crocs came back from the dead
and turned a widely mocked shoe into a
cultural icon
procs start at about 35
and were originally designed as a
comfortable shoe for boating three
friends scott siemens george bodecker
and lyndon hansen came up with the idea
while sailing in the caribbean
siemens was wearing a slip and odor
resistant clog made by a canadian
company called foam creations
bodeker and hanson thought they were
ugly but were sold on their
functionality they licensed foam
creations foam resin technology called
it crosslight and developed the croc
crocs later acquired foam creations in
2004. the shoes debuted at the 2002 fort
lauderdale international boat show and
were an immediate hit
annual revenue jumped from 24 000 in
2002 to over 108 million in 2005.
in 2006 crocs raised over 200 million
dollars in its ipo the biggest in shoe
history
in 2007 crocs had its most profitable
year in business raking in over 168
million dollars
the stock hit its all-time high of about
69 a share
so back then the brand was incredibly
hot it was growing strong strong double
digits in some quarters it was growing
triple digits so it was one of the
hottest growth stock
people people bought into it
i'm about to try croxon for the first
time in my life something i've avoided
so far because they're so ugly
[Music]
these are actually so lightweight and
comfortable i feel like i'm not even
wearing shoes
it's no wonder parents kids hospital and
restaurant workers sought them out for
their comfort and functionality
but their distinct style evoked strong
feelings
the public it seemed either loved or
hated them
when i first saw crocs i actually did
vehemently hate them like i thought they
were just completely ugly i was like
what excuse does anyone have for wearing
these ugly shoes
tyson chitundu was working on a food
truck one summer and their feet were
killing them at the end of each day
so they set the pride aside and bought a
pair of crocs
the shoes were so comfortable they
started wearing them to work class
parties and even the
club like i'm here in a pair of crocs
and i'm having a blast because i'm not
anxious to go home because my feet hurt
when i show up somewhere in crocs like
it is very evident that like i'm not too
concerned with any social hierarchy
that's going on this is how i dress this
is what makes me comfortable and that's
all i care about
because of its vocal community of haters
crocs have unwittingly become a
statement shoe
what the clogs have come to represent
has played a large role in the company's
success
to tyson chitundu wearing crocs is the
symbol of embracing their individuality
rather than conforming to conventional
ideals about fashion and beauty
something they struggled with growing up
it did come from a place of ignorance my
like deep hatred of props because i was
like
they're different and they're ugly so i
hate
them but by 2008 many had condemned
crocs as a passing fad
the company had to somehow convince a
wider audience that its shoes weren't
just about function but about fashion
and that it's fashionable to put comfort
first
but the company took some wrong turns
along the way and by 2008 the bear
outlook on crocs was gaining steam
so back in 2007 and 2008 when the
brandon hit its peak it really was
coming off the rails very quickly it was
something that we heard very commonly
from investors that crocs was a fad and
it was a trend
to keep up with demand the company grew
in an unruly fashion
it expanded into too many product lines
distribution channels and markets
worldwide
then came the 2008 recession
the company had expanded into over 5 000
skus and was saddled with excess
inventory crocs of all kinds weren't
selling
crocs lost over 185 million dollars in
2008. the stock sank to just over one
dollar a share
they grew very fast but it was not
sustainable they had over two years of
excess inventory that they had to work
through
experts say crocs fell into a common
pitfall for young companies trying to be
all things to all people
over the next several years crocs worked
on narrowing its focus
we need to focus from a product
perspective really get focused back on
our core moulded heritage get focused on
some new key product lines that we're
bringing to market we need to get
focused geographically as you said we're
extended into about 90 countries across
the globe there are five that really
matter
the company closed underperforming
stores cleaned up its distribution
network reduced overhead and cut its
product offerings by about 80 percent
and it doubled down on what the company
is known for
it's clogged
crocs staging a huge comeback once left
for dead company famous for its distinct
clogs is on fire so we went back to what
we're good at right
what crocs is good at is making a super
comfortable clog
in 2019 its clogs accounted for more
than 60 percent of sales
those shoes became extremely relevant as
consumer preferences were changing
experts say crocs helped usher in the
athleisure and ugly fashion movements
that took off around 2017.
athleisure refers to comfortable clothes
worn for exercising and general use
ugly fashion is all about defying
conventional standards of beauty the
ugly fashion trend that brought in a
huge moment for consumers to say
i can decide how it is that i want to
pull this outfit together and what is
important to me and what i feel good in
and how i want to express myself
crocs doubled down on innovating around
the clog making it a trendy statement
shoe that stood for self-expression in
individuality
it's a statement of going against the
norm something that we we considered to
be
solely built around function can
actually be transformed into a fashion
statement
crocs took a cue from hypebeast culture
and began collaborating with celebrities
designers and other brands to drop
limited edition clogs
since 2017 crox has released dozens of
limited edition clogs in collaboration
with the likes of balenciaga christopher
cade
kiss
kfc and peeps
some of those collaborations have sold
out in minutes crocs designed by post
malone are now reselling on stockx for
up to one thousand dollars
i'll honestly buy whatever crocs drops
so
they could drop ones that are super ugly
and i'll still wait in line and buy them
because i think it's so fun that you own
the pair that
nobody else has
oh i think that they have been adopting
strategies like a supreme even like a
vans like a nike where it's all about
the drop i mean it's really a page from
the luxury brands right you want things
scarce you want it unattainable it
creates demand
crocs achieved record revenues of over
1.23 billion dollars in 2019
the company sold over 67 million shoes
worldwide
in december 2019 the stock was up nearly
500 percent since the beginning of 2017.
revenue growth accelerated as
collaborations helped to captivate an
entirely new generation of customers
many of whom hadn't worn crocs since
they were little kids
gen z
so incredibly important consumer because
they influence people and they bring
more people to the brand so currently i
have about 20 pairs of frogs i own eight
pairs of crocs
i have 13 pairs of crafts i wear my
craft like pretty much everywhere i wore
them to homecoming
jenna wilkinson got made fun of for
wearing crocs as a middle school student
by the time she got to high school crocs
were officially trending
they were a shoe of choice for the visco
girl look a comfortable and viral style
of dress that took off on the photo
editing app vsco
in spring 2020 crocs has risen to the
12th most popular footwear brand among
teens
crocs attributes some of that success to
its removable charms business gibbets
which allows consumers to personalize
their clogs the personalization is very
very important it's a global mega track
right so across the globe that younger
consumer wants to be able to turn a
generic purchase into a personal
purchase and tell a story
in 2020 crox is preparing to weather an
economic downturn caused by the kovit 19
pandemic
first quarter 2020 revenues were down
five percent from the same period in
2019 in light of store closures and
reduced sales due to the pandemic
but experts say crocs is in a much
stronger position to weather a recession
in 2020 than it was in 2008
the company has over 100 million dollars
in cash
and a core product that's much more than
just a shoe
you