In 2010 Crocs, Inc appointed John McCarver as its CEO. He was the mastermind behind new product lines such rubber versions of sneakers, docksiders and ballet flats. The company reported sales of $ 1bn, making its shareholders happy.
But then disaster struck. Croc-haters started a social media campaign against the company, such as the I Hate Crocs blog. Crocs was also facing aggressive competition from cheap knock-offs, and the economic depression did not help as well. As a result, Croc’s sales, profits and share price started to tank.
In the beginning of 2013, Crocs put itself up for sale after blistering reports of financial analysts. The company hired investment bank Moelis and Company to explore various option.
There were hardly any M&A prospects, since Croc’s IP consists of “soft, comfortable, lightweight, non-marking and odor-resistant” technology, which other shoe makers do not want or need for their own footwear production.
In the end, Crocs was able to ink a deal with Blackstone Group LP (BX.N). Blackstone will invest $200 million in return for a 13 percent stake in the company. CEO McCarvel will retire in April 2014 as well as resigning as a board member.
Croc’s Chairman Thomas Smach stated that the company will appoint a new CEO who has to focus on generating sales and earnings, and not so much on product lines, opening new outlets, branding, and marketing in general. (From a marketing standpoint – that’s a kiss of death).
How I see it, Croc has run its course. The best option for the company will be to cater to its faithful customer base and move into niches (e.g., boating, gardening, beach wear).
The only way to revive the brand to its former glory is by:
- Appearing on a popular TV show (Ellen would work nicely)
- Staring a really cool PR campaign that will go viral
- Finding a style icon that will make Crocs cool (a real Carrie Bradshaw)
(Image courtesy of coolspotters.com)