Blog: Leonie BarrieCrocs down at heel

Leonie Barrie | 25 July 2008

Can things get any worse for colourful clog maker Crocs? Once the darling of the stock market, its shares plunged by nearly half this-morning on news that its second quarter is likely to be dire and it’s full year results will also miss the mark.

There’s always been a fear that Crocs would turn out to be little more than a one-hit wonder. Incredibly popular as its footwear has been – and yes, in case you’re wondering, I do have a pair – there were always doubts about the longevity of the company once the popularity of its original shoe format started to wane.

About a year ago it seemed to acknowledge this problem, rolling out more upscale shoes and boots and a new clothing line – all featuring Croslite, its patented closed cell resin – as part of a mission to turn itself into a global lifestyle brand.

But yesterday it warned earnings for the year are likely to be “break-even”, while second quarter earnings per share are seen at $0.03-0.07 – a massive drop on earlier forecasts of $0.42-0.47. Crocs is blaming the weak US market for its woes, pointing out that international sales are rising. But not, it should be added, as fast as it expected and certainly not enough to offset lower US demand.

The problem seems to be that Crocs is little more than a fad. Its brand isn’t strong enough to command prices way above those of its imitators, it’s not a wardrobe essential, and once you have a pair you probably don’t need another. And now its management have lost so much credibility it’s going to be hard for the market to take them seriously again.

It doesn’t help either that the company is going to start putting warning labels on its shoes – the second piece of bad news for the firm this week. After a series of incidents where wearers have become stuck on escalators, Crocs has devised hang-tags with tips on avoiding accidents.

So as if it’s not bad enough that people are dithering over whether or not to buy its shoes at all, the warning label might just make that decision for them.

US: Crocs shares slashed after profit downgrade


BLOG

Likely shifts in the sourcing landscape in 2017

Continuing our look at what lies ahead for the apparel industry and its supply chain in 2017, the panel of industry experts consulted by just-style last week tackled likely shifts in the sourcing land...

BLOG

Trump trade policies and China tensions top concerns

This week our focus turns to first thoughts from a panel of industry experts consulted by just-style on the challenges and opportunities likely to face the apparel supply chain in 2017, with prospects...

BLOG

Happy New Year – and a first look at 2017

Welcome back after the holiday break, and from the team here at just-style I’d like to wish all our readers a happy and prosperous New Year....

BLOG

New re:source to help unravel sourcing decisions

Apparel sourcing is a complex process built on a mix of location, logistics, lead-time, price, compliance, risk and reliability. And it's in a constant state of flux as retailers, brands and manufactu...

just-style homepage



Forgot your password?