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Battle of the Brands: The ugly shoe fight: Crocs vs. Uggs!

Posted May 6th 2008 11:00AM by Julie Tilsner
Filed under: Competitive strategy, Crocs Inc (CROX), Battle of the Brands

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Crocs, those ubiquitous colorful rubber clogs you either love or hate, are perhaps on the road out as a fad. But don't blame the fashion police: blame company shenanigans and a spate of bad PR.

Recent news reports about their safety (Japanese children have reportedly been hurt riding on escalators in their rubber shoes) have only added to the company's woes.

Crocs Inc. (NASDAQ: CROX) has seen its share price plummet in recent months, reaching an all-time 52-week low after announcing it would adjust its first quarter guidance sharply downward. The company recently shut down its rubber plant in Quebec City due to the slowdown in U.S. retail orders. The guidance adjustment shocked analysts, and the stock began to melt like, well, like rubber. Indeed, this once darling of Wall Street has been brought low from all sides. My colleague Zac Bissonnette follows the company closely, (although I doubt he owns a pair himself) and recently wondered why the company wasn't addressing its safety concerns in its 10K.

Uggs, on the other hand, is another brand that's notoriously "anti-fashion," but with several key differences. Uggs, manufactured in Australia, were popular with the beach crowd long before celebrities made them the must-have footwear a few years ago. The image of L.A. starlettes shod in the ugly sheepskin boots only served to make them more popular, and maker Deckers Outdoor Corp. (NASDAQ: DECK) has been trying to expand its style offerings in recent years. Uggs are so popular they're hard to find during the Christmas holiday-buying months.

And there's a key difference between the brands, analysts say. Crocs are everywhere, sold in a variety of low to mid-range outlets. You can buy them at some grocery stores. And at between $36 and $50, not so expensive (unless you're outraged at paying that much for rubber clogs). Not so with Uggs, which retail for upwards of $100 and limits distribution, deliberately undersupplying its market. That means that when you go looking for those $200 sheepskin-trimmed chocolate-brown Ugg boots for Christmas, you can't find them. Anywhere. And you want them all the more!

When your commodity is a fashion fad, exclusivity is important. You'd think the makers of footwear would realize this. Didn't they ask any women? It's a big duh.

Then there's product loyalty. I can't vouch for Crocs as I've never owned a pair. But I must say, I am in love with my Uggs. I'm wearing them now, in fact. (OK, these are those chocolate-brown boots I just told you about -- my favorite Christmas present, and worth every cent.) I dare anyone to don a pair in wintertime and then voluntarily remove them. They're that warm and comfortable. I will buy more Uggs in the future. I think positively of the brand, and would be more inclined to try the company's other shoe styles.

Crocs? I would probably have bought my kids a pair or two if they'd been around when they were toddlers. But they weren't. So I didn't. And now...meh. I wear my Dansko clogs instead. (or, ahem, my Uggs)

Crocs and Uggs are different enough that they shouldn't be rivals, and yet, by dint of their unique "look" they're lumped together (in the ugly shoe category). Obviously, however, the companies themselves couldn't be doing things more differently.

And just in case you hate both styles, there have been sightings of an evil Crocs/Uggs hybrid (Cruggs?!). No idea if this is Crocs' idea of the next big thing. Let's sincerely hope not.

Vote in our poll for Crocs or Uggs as your preferred brand, and let us know in the comments why you love it.

Tags: Battle of the Brands, Crocs, CROX, Cruggs, DECk, Deckers, Uggs

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