Crocs will be the next Nike. It's a bold statement, I realize, but if any footwear/apparel maker has the chance to become relevant, sustainable and as near-dominating as Nike (NYSE: NKE) has been these past 25 years, it's Crocs (NASDAQ: CROX). Understandably Crocs has a long way to go and a lot of heavy lifting in front of it before it can claim a seat at the mountaintop, like Nike. But the potential is very good as Crocs is emerging as a category-dominant player. Let's do a bit of a review to understand why.

I wrote in my book Stop Losing Money Today that Nike began in the 1970s as a fad/niche play. Nike sold its functional running shoes to the jogging set, but then quickly expanded its offerings to include all athletes in virtually every sport. The shoes were customized to handle the rigors of the individual sport. Nike also expanded its line to be fashionable and cool to wear even when its wearers weren't sweating. The company went north of the ankle to include a full line of T-shirts, warm-up suits, shorts and hundreds of other products. In essence, Nike graduated from a fad/niche player to become a full-blown global phenomenon. The company went public in 1980, and currently has a market capitalization of $27.5 billion and distributes its products through thousands of retail stores, as well as 418 of its own NikeTown stores. Revenues are running at a $17-18 billion run-rate with healthy operating margins of 14%. Nike is truly a great American success story.

Crocs has the same opportunity and it may even be larger.

Continue reading Crocs is the next Nike

Crocs is the next Nike originally appeared on BloggingStocks on Sat, 26 May 2007 07:34:00 EST. Please see our terms for use of feeds.

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