This post is written as part of AOL Money & Finance's Best & Worst 2006. Vote for Crocs as the up and comer of 2006 or check out the other nominees in the category.
Beauty is in the eye of the beholder. You may not have thought a brightly colored plastic-looking clog thing would be something you'd clamor to buy -- but then that was before everybody on the planet had a pair.
There's probably not a kid under five who can't be seen trotting along in a brightly colored pair of these comfy shoes ... trailed closely by a mom or dad shod in their own.
Crocs, Inc. (NASDAQ: CROX) went from $1 million in revenue in 2003 to a projected $322 million this year. Its February IPO gave the footwear maker a market cap of $1 billion.
But it took more than a parenting trend to put Crocs on the big boy map. What started out as a lark by three middle-aged business guys turned almost overnight into another American success story thanks to a savvy business strategy. A little celebrity favor didn't hurt, either.
In 2003 the company was doing $1 million in business -- not bad considering sales were largely driven through word of mouth. Then the founders hired an old college chum -- retired Flextronics executive Ron Snyder -- to help them grow to the next level. In 2004 Snyder bought the Canadian business that manufactured Crocs and owned the rights to the resin that gave the shoes their particular comfort and odor resistance -- called Croslite. Now the company owned the means of production ... and suddenly it was a whole different ball game.
Snyder next set his sights on the global market. He set up plants in China, Mexico, Italy, and Romania. International sales drove the company to record revenues and now accounts for some 30% of its business. For example, one in six Israelis owns a pair. The company says it's on board to sell some 20 million pairs of shoes this year.
Croc's is marketing on its trendy success -- it's opening a giant store in New York's uber-hip SoHo district, and is branching out into corporate branding, making special Crocs for companies like Google Inc. (NASDAQ: GOOG), The Walt Disney Company (NYSE:DIS), and the L.A. Lakers.
The company's in fashion now. But can a shoe company stay hot? We'll see if Crocs's business model can keep its teeth sharp and keep it swimming with the big boys.
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Reader Comments (Page 2 of 2)
12-17-2006 @ 11:58AM
Beth McHenry said...
I wear my crocs everyday and I am comfortable. I do not think that they are ugly, beauty is in the eye of the beholder. My friends that wear highheeled shoes are usually in pain at the end of the day, I still have a spring in my step. I have even got some of my hardcore co-workers to try them, they are now hooked on crocs. I loved them from the beginning and hope to get my family and friends hooked on them too! Only the real crocs will do, the knock-offs are not the same.
12-17-2006 @ 12:30PM
Brittney said...
They are making some cuter ones now. When they were just making the clogs I refused to wear them, but I just bought a pair that look like really cute flats. I have gotten a million compliments on them and people are always stunned when I tell them they are Crocs.
12-17-2006 @ 1:24PM
Judi Wright said...
I have 2 pair, the traditional clog style, and new mary janes. They are the best shoes for people on their feet. Mine are adorned with "Jibbits" I do saint bernard rescue, i have the letter "i" a heart and a dogs face on one and a paw print on the other. Real conversation pieces. The mary jane style is very cute, and looks like regular shoes. All of our volunteers now wear crocs.
12-17-2006 @ 1:24PM
Jerry Ann said...
These shoes are remarkable!! I was first introduced to crocs when I flew up north for my grandsons 1st yr. b-day. The stewardess was wearing a pair of hot pink ones. When I got home I got online & ordered a pair of tan ones. Next month I think I will get a pair of light blue ones. Oh my!! My closet will be filled with crocs eventually....lol If you haven't tried a pair yet, do it!! A billion dollars worth of shoes sold should tell ya something.
12-19-2006 @ 8:25AM
JoAnn Kern said...
I love CROCS! I can't think of a better all around shoe. They have replaced the tennis shoe for me and my family. I can not tell you how many of my Aunts, Uncles, cousins and friends wear only crocs. My niece says she needs to send her Mom to Crocs anonymous because she owns so many pairs. Do yourself a favor--- try a pair of Crocs! :)
12-20-2006 @ 10:11PM
Richard said...
Hey...crocs rock! Got my first and only pair, so far, as a gift last summer...They are hot (as in cool) and now Wal-Mart has a knock off version for under 10 bucks called "no boundary's"...hmmm...we'll see how long they last as a copy cat.
12-20-2006 @ 10:47PM
Joy said...
A heel spur and plantar faciitis; bad knees - oh, my, what a lifesaver ! I can walk the flea markets, craft shows and malls all day without any problem.
My back doesn't hurt either. My husband now has a pair and only people that have these problems can appreciate the comfort. He has RA and while at the doctor, I noticed an ad in the Arthritis magazine endorcing these shoes...the make them with a deeper toe box for arthritic patients. They really have some cute styles coming out now. Thank you, thank you, thank you....whoever designed and patented these. The best part is you can afford them. To the people that say they would never wear the ugly things - - I say, "You have haven't have foot problems like the rest of us!" - - hope you don't...
1-09-2007 @ 8:38PM
Gabriele Nesta said...
Be VERY careful! I owned 10 pairs of Crocs, and wore nothing else to work (in a hospital). I walked everywhere in these Crocs. Then one day, outside on a cement sidewalk, i fell flat on my face. Blaming it on the sidewalk, i continued wearing my Crocs. Less than 2 weeks later, i fell again, flat on my face, again outside. This time i severely injured my left leg, which took the brunt of the fall. These shoes, while extremely comfortable, are very dangerous. I wore them for 6 months without incident. Something about the shoe "sticks" or catches to surfaces, and it forces you to fall forward without warning, directly on your face. I have read other comments on other sites about this happening, and i have heard people at work comment on the fact that they sometimes catch themselves from falling face forwards. This company is doing very well but they are going to be in for some nasty lawsuits. Something about this shoe is very dangerous. Be very careful wearing your Crocs. We threw all of mine out.
1-30-2007 @ 3:44PM
john landry said...
Walmart to begin marketing their own knockoffs.: I have a friend who works there and tells me they're getting in on the foam shoe craze. Payless already sells a nice knock off. I own a pair of Crox and Payless Airwalks. Honestly you can't tell the difference. Payless has some really nice color patterns. I have camo Payless, and they have a nice pink marlblized model now recently in their stores. I bought my daughter a pair of Pink Crocs. So I know there's no difference in the quality, only the marketing. Crocs is doing some excellent marketing. But any foreign company could do the same and beat them in the international market. Walmart had a version last year but they were aweful, now they're using a vendor who supplies Payless. The Chinese apparently are not loyal to any one partner. I hear $12 is the price Walmart plans to charge but that's hearsay. It seems to me the barriers to entry in this market is very low so margins should come under pressure. Heck, AMD and Intel are battering each other's stock price. And the barriers to entry there are huge. Foam shoes? Hah. Insiders are selling, I don't know, this bubble is gonna burst eventually. Most the stock is already sold short and other than the insiders there's no sellers. Hard to see how this will play out, and how long it'll take, but take a look at TASR for timing.