Unless you have been living under a rock in the last decade or so, you have surely seen at least one of those half covered, brightly colored, funky looking shoes or clogs as this type of shoes are popularly known. It is not often that a brand’s name becomes a synonym for the products they are selling, but that is exactly what has happened in the case of Crocs Inc. While the company produces a wide range of footwear products, the one common factor is that all of them are referred to as just Crocs. Talk about branding!
The unique design, the lightweight build and some really cool features being added to every piece of footwear produced, have helped Crocs establish a really strong standing in the market today. Thanks to a trademarked close-cell resin material used to develop the footwear, every product from the Crocs stable is odor-resistant, slip-resistant and supremely lightweight. All of these features have made Crocs shoes extremely popular for people who have to stay on their feet the whole day, like a restaurant or hospital employees. While the shoes initially gained popularity for the many features, especially in the professional communities and for activities like boating, hiking, and fishing, the footwear started gaining traction as a fashion statement too, as it caught the eye of a few celebrities. The standard Crocs come with a removable back strap, which the wearers can keep changing as and when they please, adding to the shoe credibility as a fashion accessory.
Crocs were established in the year 2002, by three friends named George B. Boedecker Jr., Scott Seamans, and Lyndon V. Hanson III. All three of them were serial entrepreneurs already and had experience of building businesses in different industries. The inspiration for the shoe came from a chance encounter Boedecker and Seamans had while on a sailing trip when they came across a new boating clog developed using closed-cell resin by a Canadian Company. The material allowed the shoe to be lighter than other boating shoes, while also providing a comfortable fit and slip-resistant properties. The material also kept the show odor-free for long stretches, making it the ideal one for several outdoor activities. The two friends discussed the possible modifications to the original design and acquired the rights to the shoes from the Canadian company. Hanson was brought in to set up and oversee the operations of the company, while Seamans worked on improving the design and Boedecker, as the CEO, started lining up potential investors.
In November 2002, at Ft. Lauderdale International Boat Show, Crocs made its debut with its first clog, called “The Beach”. The clogs were remarkably sold out within minutes, with the enthusiasts attending the event snapping up all 1000 pieces the company had put up on offer. Another landmark in the early stages of Crocs came in March 2003, when the company participated in the Shoe Market of the Americas. The brand was approached by several retailers to carry the shoe. While initially popular among the boating community, the shoe soon became famous among people from different walks of life. People who had to stand or walk all day, people who had swollen feet or other ailments and people who just wanted to sport something trendy and colorful, everyone started warming up to crocs. In the first full year itself, Crocs generated $ 1.2 million in sales, with 76,000 pairs sold. The very next year saw exponential growth for the company, as the revenue grew tenfold to $ 12.3 million, with close to 650,000 pairs sold!
Taking big steps
Up until 2003, the manufacturing was being handled by Foam Creations, the Canadian company that originally developed the clogs. In 2004, Western brands, the parent company of Crocs, acquired Foam Creations and brought the manufacturing in-house, while also acquiring the rights to the resin material, called Croslite.
With the continued success of the brand, George Boedecker stepped down as CEO in 2005, as the company started preparations to go public. He succeeded by Ronald R. Snyder who had a great track record in growing companies. Boedecker continued to serve on the board of directors of Crocs, while also being involved in the marketing. Later that year, Crocs laid the base for its Initial Public Offering (IPO), as the company announced its plans of introducing a new apparel and accessories line, taking the brand beyond footwear and into the full-fledged lifestyle space. T-shirts, sunglasses, hats and even gardening kneepads were launched bearing the now famous crocodile logo, while new clogs were continually designed and launched. The same year, the company also launched its first national advertising campaign, in order to connect with the potential customers and investors nationwide. As a result of the ad campaign, the company crossed the $ 100 million mark in terms of revenue, selling over 6 million pairs for a total of $ 108.8 million in sales. This was also the first year where the company recorded net profit for the first time, an impressive figure of $ 16.7 million.
In February 2006, the IPO was launched, with a price of $ 21 per share. Roughly $ 208 million were raised from the IPO, making it a huge success. As the company continued to grow rapidly, it kept launching new lines, including new women’s shoe models and its first ever line for children. Crocs also made inroads into several countries including Austria, Sweden, and UK.
With success, as is often the case with lifestyle products, there was a rapid burst of knockoffs entering the market. In March 2006, Crocs obtained patents covering its manufacturing processes and the several features that came with the unique styling of their footwear.
Crocs Inc. has a wide range of products on the market today, but 96% of its sales come from shoes alone. The company has license agreements in place with several universities and sports teams, along with a huge license deal with entertainment giants Disney. The current market valuation of Crocs stands at $ 1.62 Billion, an impressive feat for a brand that started off with selling clogs targeted at boating enthusiasts.
Speaking of India, the country is one of the fastest growing markets for Crocs. The company has already set up more than 100 exclusive stores in India and is said to be very optimistic about the growth of the brand in the country. In 16 years of presence in the country, over 350 million pairs of Crocs have been sold, with the top management positive that this number will keep growing at a healthy rate.