crocs shoes: "ugly", but a wildly profitable $4 billion a year

Holey shoes have become a summer must-have

"Why doesn't everyone wear sandals in summer?" Recently, the topic of sandals rushed to the microblogging hot search list, under this topic, we have given their own reasons not to wear sandals, "hole shoes is a must in the summer", some people left a message under the topic, harvested more than 5,000 likes.

This microblogging opened the floodgates of "hole door people" catharsis: "There are only two kinds of people in this world, one is the person who has worn hole shoes, the other is the person who hasn't worn hole shoes, but there is no such thing as a person who only wears hole shoes once" "No matter how well-dressed you are, you will always wear hole shoes. dress up how exquisite, are consistently wearing hole shoes people, certainly not bad to go, this is my view of good and evil, hole door" "In addition to the rain are wearing, wearing hole shoes every day to work who can understand the joy?"

In fact, "hole shoes cyclone" has been a long time, love to wear hole shoes consumers usually refer to themselves as "hole door people", "hole door forever" is also often shouted their slogan. In ins, just hole shoes notes up to 380,000, many people will share their own hole shoes wearing experience, which is the highest frequency of Crocs brand hole shoes, just as Coca-Cola has become synonymous with Coke, the creation of hole shoes style Crocs is the track deservedly the big brother.

Crocs hole shoes design inspiration from sailing, the early 21st century, the company's founders believe that this type of shoes are very suitable for wearing on the beach and boat, so they bought this design patent, and a closed resin called Croslite to be the production of raw materials. Because the upper body is lightweight and comfortable to wear, hole shoes were once popular around the world, becoming a must-have for the general public to wear.

In China, Crocs is also a rare seasonal explosion. croc lights visited a number of Crocs stores found that Crocs offline store traffic is very high, when the nearby FILA, MLB and other brand stores are sparse, Crocs stores are very lively. Many consumers can not find empty seats, had to choose an empty space "golden chicken". "The two models of clouds and puffs sell the best, and are often out of stock," said a clerk to Croc Lights.

Do not do their own factories Crocs also fattened many foundries, has been listed Quan for the science and technology, said to croc lights, its subsidiary Ai Paike is the first-class supplier of Crocs. The two companies have maintained long-term cooperation since 2014, last year, love Paike had said, according to Crocs key account department feedback, the company's orders on hand far more than the same period. 2022, love Paike's revenue of 419 million yuan, in order to meet the growing demand for orders, the company also invested 100 million yuan to build a new factory in Vietnam, the financial report shows that the Vietnam factory has achieved profitability.

"Caveman" growth also directly drive Crocs parent company Crocs revenue increased greatly. 2023 quarter, Crocs revenue rose 33.9% year-on-year to $884 million, of which the main brand Crocs contributed $649 million, an increase of 19% year-on-year. As a result, Crocs also raised its full-year 2023 earnings estimates and expects to record total revenue of $3.945-$4.045 billion in fiscal 2023. 2022 Crocs' revenue jumped 53.67% year-on-year to $3.555 billion, while net income was $540 million.

In addition, Crocs has been recognized by Morning Consult as one of the fastest-growing brands of the year, behind Facebook's parent company Meta, due to its 53.7% growth rate in 2022.

How did these "ugly" shoes catch on?

Though the cavernous shoe was a big hit and made Crocs a lot of money, the shoe has always been associated with the "ugly" comment since its inception.

Crocs cavernous shoes were not only the Los Angeles Times as "one of the most ugly objects on earth", when former U.S. President George W. Bush wore cavernous shoes, the public's criticism of cavernous shoes has not been reduced, on the contrary, it is said that George W. Bush is like a "no frills" of the The public's criticism of the shoes did not diminish after President George W. Bush wore them.

In order to express their disgust for Crocs, some people even created a website called "I Hate Crocs" (我讨厌Crocs)，"they are big and bulky, and cause visual pollution like the damage caused by second-hand smoke to lungs", said the founder of the website. ", the founders wrote on the site.

Famous designer Victoria Beckham, after receiving Crocs from Justin Bieber, launched a poll on social media platforms asking netizens if they would like to wear the shoes themselves, and most of them gave an opposing opinion, and she followed the anti-holey shoe brigade's point of view, commenting "Holey shoes I'd rather die than wear! "

In the face of the onslaught of negative criticism, Crocs insisted that "I'm ugly, so I'm here", and Michelle Poole, its global merchandising director, once said to the public: "We are a brand that people are happy to 'black'. We are a brand that people love to 'black out'. In fact, it is this tension that keeps us in the limelight."

Black and red is also red, understand this truth Crocs began to "intensify", through time and again and major brands co-branded way, will be ugly marketing out of the circle, this self-black marketing Crocs made a big splash at the same time, but also effectively led to the growth of sales.

The most sensational time is 2018, Crocs and luxury brands Balenciaga launched a joint hole high heels, product photos published, this fluorescent pink color, thickness up to ten centimeters of the hole shoes is known as "360 degrees are all dead ends", the price of $ 850 discourages people, but it is a few seconds! The shoes were sold out in seconds. Both sides seem to be very satisfied with this cooperation, and last year, the two companies jointly launched a fluorescent green high-heeled cavernous shoes, so that many people called "can not stand".

A of honey, B of arsenic, for some people "ugly cry" of the hole shoes, but the paradise of customization enthusiasts, in addition to the basic models of hole shoes, Crocs also has a unique shoe flower culture, encouraging users to customize their own hole shoes through the form of DIY. These shoes located in the front of the hole shoes flower also has a special name for their own - "Jibbitz", a set of genuine Jibbitz usually have five small accessories, the price of DIY alone will be able to buy a pair of low-priced Crocs.

Ning, who has already bought five pairs of Crocs, is one of the modification enthusiasts. She recently purchased a pair of black holey shoes from the Crocs Light Wheel series, and because she likes dark, fluorescent dressing styles, she also purchased a niche shoe cover, which, along with the price of configuring the Jibbitz, cost her as much as $300 USD on the shoes.

"For Crocs before the understanding is just a comfortable and breathable slippers, in recent years everyone's aesthetics are catching up, some manufacturers of shoes and flowers out of a lot of good-looking accessories, but also let the shoes to enhance the playability," she said, "she recently found an accessory called croc lights , which is a shoe light that clips onto the shoe not only beautifully, but also gives her enough light when walking her dog at night, and will continue to buy Crocs in the future, because DIY is addictive."

In addition to reshaping the minds of consumers through marketing, changes in the external market have also given Crocs, which focuses on comfort and a sense of looseness, room to grow like a fish out of water. According to the magic mirror market observation, in 2022, in the context of the men's and women's shoes market declined by 19.4% year-on-year, the sales of women's shoes slippers increased by 3.3% year-on-year. From this point of view, "I am afraid that comfortable footwear is also a consumer embodiment of the contemporary high-pressure urban life, hit workers seeking a sense of relaxation."

As the originator of the hole shoes, Crocs also has a unique technical barriers. Crocs with Crostile resin is contained within the closed cell resin, the biggest feature is the ability to automatically deform under the effect of body temperature to adapt to the shape of the foot, this non-slip, anti-odor, non-marking anti-bacterial material is undoubtedly the Crocs shoes can be differentiated from the competitors and the imitators of the key to it.

The company has had its moments

Crocs wasn't always this hot, it had its dark days, a long downturn.

When it went public in 2006, Crocs' parent company, Crocs, set a record for the highest first-day share price rise for a footwear company on the Nasdaq, tripling its share price in a year. That was the first phase of its high moment, and then the situation took a sharp turn for the worse.

With the onset of the financial crisis in 2008, Crocs' stock price took a big dive, and the original share price of nearly 70 dollars fell directly to 1 dollar, facing the risk of delisting. Due to the weak consumption at that time and the proliferation of folk imitations, the company faced a huge inventory problem, which directly led to the layoff of more than 2,000 employees that year.

After learning the lesson that the big single product strategy could not resist the risk, Crocs began to obsess about expanding its product line after briefly being a favorite in the capital market. In order to get rid of its dependence on big-item cavernous shoes and to please the growing anti-cavernous-shoe brigade in the court of public opinion, Crocs launched a variety of product lines without stopping, including apparel made of resin material, boots with leather and suede material, high heels, and rainboots, etc. By 2012, the company's cavernous shoes accounted for only 46% of its revenue.

According to the ideal storyline, when a company breaks out of its big-item curse and diversifies, it should raise champagne in celebration. However, due to the radical expansion of stores, non-core categories of sales and management costs soaring and other factors, Crocs failed to completely reverse the previous financial situation, once also rumored to be sold news, on the other hand, due to the category is too cluttered, and even weakened the sense of the existence of the core single product, but also let Crocs hole shoes "ugly" without a sense of existence. The sense of existence.

Success also big single product, defeat also big single product Crocs regret. 2014, Crocs chose to access foreign investment Blackstone to carry out reorganization. When the news of Blackstone's entry into the company came out, the capital market was applauded, and on the same day, Crocs' stock price rose 21.08%, reaching the highest point since that month.

Through a series of production line cuts and inefficient store closures, Crocs has returned to its comfort zone, specializing in holey shoes. Heidi Cooley, the company's CMO, later admitted, "We finally recognized that we were unique."

In 2018, Crocs announced that it was officially closing all of its own factories and outsourcing all of its factories. That was also the year that Crocs, which hadn't turned a profit for three consecutive years, kicked off five consecutive years of double-digit earnings growth, and its stock price doubled tenfold over the course of five years, going from around $10 to a high of $183.88. "Crocs is going to be one of the most impressive consumer growth stocks of the next few years," one analyst noted.

"Crocs is coming back from the dead," writes the founder of the website that hates holey shoes in 2021, "and it's actually on fire again."

Through continuous marketing efforts, Crocs' growth rate in the Asia Pacific region has improved significantly. In the first quarter of this year, Crocs Asia Pacific's revenue was $140 million, up 46.1% year-on-year, outpacing growth rates in North America and EMEALA (Europe, Middle East, Africa and Latin America) during the same period. On a constant currency basis, revenue in China grew more than 110 percent in the quarter. "In the future, we plan to further increase the business share of China, the world's second largest footwear market," Crocs mentioned.

After several twists and turns Crocs is now finally on the "smooth road", but can not be considered completely carefree. The U.S. Securities and Exchange Commission disclosed documents at the end of May, Crocs Group President Poole Michelle in recent days accumulated more than 2.07 million dollars in cash, caused by the stock market shocks, executives in the performance of the moment of the rise of cash, but also caused the outside world on this quite a lot of questions.

June 15 closing, Crocs per share reported $ 115.09, compared with the all-time high in November 2021 shrunk nearly 40%, the total market value is no more $ 10 billion glory, only $ 7.139 billion.

For the capital market, pursuing a large single product strategy of the company is often due to the lack of risk resistance for this reason is seen as weak, Crocs is a rare due to the decline of the hole shoes, but also due to the hole shoes and the prosperity of the unique sample.

When people pay more and more attention to comfortable, portable wear, judging "ugly" for beauty, join the "hole door", it seems not surprising.