Crocs

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Crocs, Inc.
Public
Traded asNASDAQCROX
S&P 600 Component
IndustryWholesale Trade, Retail & Consumer Services, Clothing & Clothing Accessories
Founded2002; 16 years ago (2002)
HeadquartersNiwot, Colorado, U.S.
Key people
Samuel Thomson (Creator),
Andrew Rees (CEO)[1]
ProductsShoes
RevenueDecrease $1.023B (2017)[2]
Increase $16.54M (2017)[2]
Increase $10.24M (2017)[2]
Total assets$543.695M (2017)[2]
Number of employees
4,900, including 3,000 in retail-related functions (2014)[3]
WebsiteOfficial website

Crocs, Inc. is a company that distributes and once manufactured a foam clog shoe.

History[edit]

Crocs was founded by Scott Seamans, Lyndon "Duke" Hanson, and George Boedecker, Jr. to produce and distribute a foam clog[4] design acquired from a company called Foam Creations. The shoe was originally developed as a boating shoe. The first model produced by Crocs, the Beach, was unveiled in 2002 at the Fort Lauderdale Boat Show in Florida, and sold out the 200 pairs produced at that time.[5] It has since sold 300 million pairs of shoes.[6]

Manufacture and patents[edit]

In June 2004, Crocs purchased Foam Creations and their manufacturing operations to secure exclusive rights to the proprietary foam resin called Croslite. Croslite is a closed-cell resin,[7][8] described by third parties as an injection-moulded EVA foam.[9] The foam forms itself to a wearer's feet and offers purported medical benefits, according to a number of podiatrists.[10][11] Crocs holds one patent covering "breathable workshoes and methods for manufacturing such", U.S. Patent No. 6993858 B2 issued February 7, 2006, and three design patents covering various ornamental aspects, U.S. Patent Nos. D517788, D517789, and D517790 issued on March 28, 2006.

As of 2007, the company had applied to register "Crocs" and the Crocs logo as trademarks in over 40 jurisdictions around the world, including the U.S.; many such applications were pending approval. Crocs also extended the scope of their trademark registrations and applications for both the Crocs mark and logo to cover non-footwear products, such as sunglasses, goggles, knee pads, watches, luggage, and some of their Internet sales activities.[12]

Products[edit]

Crocs are made in a variety of colors.

Crocs are made in a variety of styles. They are manufactured in Crocs plants in Italy and Mexico, both of which are slated to close by the end of 2018, whereupon Crocs manufacturing will be entirely outsourced.[13]

The shoes are produced in an array of colors, depending on the model. The Classic styles are available in more than 20 colors; most other styles are produced in a palette of four to six colors or two-color combinations. There are different styles of Crocs that are made so they can be worn in any season.

Crocs also sells other fashion accessories. Jibbitz are decorations that can be clipped to the ventilation holes in the shoes. These include designs, mainly aimed at children, which feature Disney characters. The company has also released a line of purses in a variety of colors.

A "Fuzz Collection" with removable woolly liners extend the range into winter wear.[14]

In 2008, the company entered the golf shoe marketplace, acquiring golf shoe manufacturer Bite Footwear. A Croc-styled pair of golf shoes, the Ace, was introduced.[15]

Imitations and counterfeits[edit]

A Crocs imitation named Duralite sold in the Philippines

Crocs announced in 2006 that it filed complaints with the United States International Trade Commission (ITC) and the United States district court against 11 companies that manufacture, import or distribute products, called "croc-offs",[16] that Crocs believes infringe its patents.[17] Seizures of fake Crocs occurred in 2007 in the Philippines[18] and Denmark,[19] and were under litigation in South Africa.[20] In 2010, the United States Court of Appeals for the Federal Circuit held that Crocs' design patent had been infringed.[21]

In 2007, the U.S. Consumer Product Safety Commission requested a voluntary recall of Crocs-like clogs due to a potential choking hazard involving detaching plastic rivets.[22]

Crocs-like brands include Airwalk, Crosskix, Poliwalks, USA Dawgs/Doggers, NothinZ, Veggies, among others. Versions of the Croc style clogs have appeared in children's fashion catalogs, usually under their own name brands or as no names. Other knock-offs are in discount stores, amusement park stores, beach stores, department stores, and superstores.[16]

Health and safety[edit]

Escalator safety sign warns: Take extra care when wearing soft plastic shoes
Crocs sandal

Some Crocs shoes were tested and recommended by the U.S. Ergonomics company in 2005[23] and were accepted by the American Podiatric Medical Association[24] in 2009.[10] In 2008, the U.S. government Centers for Medicare and Medicaid Services approved a model of Crocs with molded insoles as diabetic footwear, to help reduce foot injuries.[25]

Footwear such as Crocs and flip-flops came under scrutiny in 2006 in the U.S. and 2008 in Japan when children suffered injuries after the shoes became caught in escalator mechanisms.[26][27] This was due to the soft shoe material combined with the smaller size of children's feet.[28] In 2008, Japan's Ministry of International Trade and Industry, after receiving 65 complaints of injuries, requested that Crocs change its design.[27]

Internationally, some healthcare facilities introduced policies in 2007 regulating Crocs. Rapid City Regional Hospital in South Dakota changed its dress code to prohibit the sandal variants and those with holes, citing safety concerns, but allowed closed-top "Professional" and the healthcare-focused "Rx" Crocs to be worn.[29] Over 100 hospitals in Canada were advised to implement similar policies.[30][31] Blekinge and Karolinska University hospitals in Sweden banned the wearing of "Forsberg slippers" (Foppatofflor)[32] by staff, due to high voltage static electricity buildup which was observed[33] to interfere with electronic equipment.[34][35][36] City hospitals in Vienna, Austria announced banning Crocs, often worn by nursing staff, to comply with antistatic requirements.[37]

Crocs announced the Fuse and two others in 2009, formulated to dissipate static electricity in accordance with European standard EN ISO 20347:2004 (E), for use in the medical sector.[38]

Acquisitions[edit]

Various types of Crocs with accessories

In October 2006, Crocs Inc. purchased Jibbitz, a manufacturer of accessories that snap into the holes in Crocs shoes, for $10 million, or $20 million if Jibbitz met earnings goals.[39]

In January 2007, Crocs acquired assets of Ocean Minded[40] for $1.75 million in cash, plus potentially $3.75 million based on performance. Ocean Minded makes leather and ethylene-vinyl acetate-based footwear.[12] In July 2007 Crocs agreed to buy shoe- and sandal-maker Bite Footwear, based in Redmond, Washington for $1.75 million, or up to double that based on earnings results.[41]

In April 2008, Crocs acquired Tidal Trade, Inc. ("Tidal Trade"), the company's third party distributor in South Africa, for $4.6 million. The company recorded $1.4 million in customer relationships on the date of acquisition. Crocs repurchased inventory previously sold to Tidal Trade and accordingly recognized a reduction of revenue of approximately $2.1 million.[15] Also in April the company acquired Tagger International B.V. ("Tagger"), a private limited liability company incorporated under Dutch law that manufactures messenger bags. Tagger was partially owned by the Managing Director of Crocs Europe B.V. The company acquired all Tagger assets for $2 million – $90,000 for inventory and $1.9 million for the Tagger trademark.[15] Later in June, Crocs liquidated Fury, Inc. two years after acquiring it,[42] after efforts to sell it off were unsuccessful. As a result, Crocs wrote off $250,000 related to the remaining customer relationships, intangible assets and trademarks over three months.[15]

Influence on fashion and culture[edit]

In a 2007 episode of his TV series, comedian Bill Maher stated, "New Rule: Stop wearing plastic shoes."

Starting in 2006, sales of Crocs increased dramatically,[43] with first-quarterly sales roughly tripling from 2006 to 2007, according to The New York Times.[44] An article in The Washington Post described the phenomenon: "Nor is the fashion world enamored of Crocs. Though their maker touts their 'ultra-hip Italian styling,' lots of folks find them hideous."[10] Tim Gunn, fashion consultant, told Time magazine, "... the Croc – it looks like a plastic hoof. How can you take that seriously?"[45] A 2008 anti-Crocs essay by Steve Tuttle in Newsweek[46] generated much response from readers who both agreed and disagreed with it.[47]

In 2007, then-President George W. Bush wore black Crocs with socks publicly.[48] In August 2009, First Lady Michelle Obama was spotted wearing Crocs with her daughter.[49] On June 14, 2015, 23-month-old Prince George, son of Prince William and Kate Middleton, was photographed at a charity event wearing navy blue crocs. After one week, this created a 1,500 percent increase of sales, according to an Amazon.com spokesperson.[50][51]

Crocs were ranked #6 on the "Worst" list of Maxim's "The 10 Best & Worst Things to Happen to Men in 2007."[52] In May 2010, Time magazine listed Crocs as one of the world's "50 Worst Inventions".[53]

The shoes have been targets of satire: on Real Time with Bill Maher, Maher called for a "New rule: stop wearing plastic shoes,"[54] and The Daily Show "Senior Public Restroom Correspondent" Rob Corddry, following up on the Senator Larry Craig June 2007 lewd conduct arrest, "reported" that anyone wearing Crocs is signalling "anything goes".[55]

A blog named IHateCrocs.com was founded by two Canadian college students (one, Kate Leth, referred to the shoes as "hideous"), while the website CrocFans.com documents uses of the shoes.[44] The Facebook group, I Don't Care How Comfortable Crocs Are, You Look Like a Dumbass, has been mentioned in the media.[56][57][58]

Crocs was the title sponsor of the Association of Volleyball Professionals (AVP) Tour from 2006 through the 2009 season.[59][60]

Legal actions[edit]

In November 2007, a class action lawsuit was filed against Crocs Inc., alleging that the company and certain of its officers issued false and misleading statements during the Class Period[clarification needed].[61] A settlement of $1,000,000 was reached in 2011.[citation needed]

Stock[edit]

Crocs completed the initial public offering of its common stock in February 2006. It began trading on the NASDAQ Stock Market under the symbol CROX. On October 30, 2007, the stock dropped 24% when the company announced decreased revenue projections.[62] On April 14, 2008, during the midst of the financial crisis of 2007–2008, the stock dropped 30% in after-hours trading after the company issued a press release in which they significantly decreased earnings estimates for the first quarter. In the same statement they also said they would lay off its 600 Quebec City factory employees as retailers have been reducing orders, though about 100 sales and marketing positions would remain. "The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed," chief executive officer Ron Snyder said. During the financial crisis, CROX dropped to as low as $0.79 before rebounding ($15.50 by November 2010).[63] On October 18, 2011, Crocs stock suffered a single day drop of about 39.4% on lowered earnings and revenues forecast.[64]

In June 2013, Crocs reported a 42.5% decrease in net profits from a year before. As a result, the stock fell 20.2% in one day.[65]

In December 2013, embattled hedge fund SAC Capital Advisors has disclosed a 5% stake in footwear manufacturer Crocs just over a day after The Blackstone Group said it would invest $200 million in a convertible preferred stock offering that will allow the company to replace its CEO and buy back $350 million in stock. SAC Capital management said in a filing with the Securities and Exchange Commission on Tuesday it had accumulated a 5% passive stake in Crocs.[66]

Restructuring[edit]

On 21 July 2014, Crocs, Inc announced a restructuring plan to streamline its operations and workforce by eliminating 180 jobs, close 75 to 100 stores (out of 624 worldwide) as well as scrapping underperforming product lines. Crocs has previously eliminated 183 positions, including 70 current and planned positions in its corporate headquarters in Niwot, Colorado. Crocs also announced they would open a "global commercial center" with 50 to 75 employees in Boston, Massachusetts in 2014, for merchandising, marketing and retail functions.[67] In August 2018 Crocs announced it was closing its last company operated manufacturing plants in Mexico and Italy.[68]

References[edit]

  1. ^ "Crocs - Leadership Team". Retrieved 6 March 2018.
  2. ^ a b c d "Crocs, Inc. Annual Report For the Year Ended December 31, 2017". U.S. Securities and Exchange Commission. Retrieved April 22, 2018.
  3. ^ "Crocs, Inc. Annual Report For the Year Ended December 31, 2014". U.S. Securities and Exchange Commission. Retrieved January 21, 2016.
  4. ^ Anderson, Diane (November 3, 2006). He was also the founder of Sea World. "When Crocs attack, an ugly shoe tale". Business 2.0. CNN.
  5. ^ Wellington, Elizabeth (July 5, 2007)."Fashion Attack". The Philadelphia Inquirer. Retrieved August 25, 2007.
  6. ^ Bhattarai, Abha (19 September 2017). "Crocs' billion-dollar strategy: Stay ugly". Toronto Star. Retrieved 19 September 2017.
  7. ^ Maniscalco, Michelle (March 2007). "E-shots Web-exclusive: Patent check: What's in a Croc?". Injection Molding Magazine. Retrieved July 31, 2007.
  8. ^ US 6993858 
  9. ^ "Material Matters: Eva Foam". Sneaker Freaker. November 2, 2016.
  10. ^ a b c Huget, Jennifer (August 1, 2006). "Not Such A Croc". Washington Post. pp. HE01. Retrieved August 13, 2007.
  11. ^ "Form 10-K for Crocs Inc." "Crocs 2006 Annual Report". Yahoo!Finance. March 31, 2006. Archive. Accessed April 29, 2007.
  12. ^ a b "2007 Crocs annual SEC Report". Crocs/SEC. January 31, 2008. Retrieved November 26, 2008.
  13. ^ "Crocs closing all manufacturing facilities, announces CFO's resignation". Scripps TV Station Group. August 8, 2018.
  14. ^ "Crocs, Inc. Introduces New Fall Collection at FFANY". Business Wire. Business Wire. Retrieved 19 November 2015.
  15. ^ a b c d "SEC 2008 3rd Quarter Report". Crocs. September 30, 2008. Retrieved December 25, 2008.
  16. ^ a b "A chip off the ol' Croc, Sure, they're ugly. But the popular, funky clogs have plenty of imitators at their feet." Fort Worth Star-Telegram (TX). September 7, 2007. p E3.(subscription required)
  17. ^ "CROCS, INC, Form 10-Q, Quarterly Report, Filing Date Aug 14, 2006" (PDF). secdatabase.com. Retrieved May 15, 2018.
  18. ^ "NBI seizes P16-million fake Crocs footwear". The Philippine Star. February 7, 2010.
  19. ^ "Burning rubber"[permanent dead link]. The Copenhagen Post online. June 10, 2009.
  20. ^ Schroeder, Fatime (February 28, 2007). "'Fake Crocs' battle going to court". South Africa: Independent Online. Independent Newspapers (Pty) Limited.
  21. ^ Elinson, Zusha (February 25, 2010). "Circuit Court Sides With Crocs in Patent Fight". The Recorder. ALM. Retrieved June 27, 2012.
  22. ^ "Payless ShoeSource Expands Recall of Children's Clog Shoes Due to Choking Hazard" Archived October 6, 2011, at the Wayback Machine.. U.S. Consumer Product Safety Commission. July 17, 2007.
  23. ^ Costello, Kevin (March 7, 2005). "Ergonomics Analyses of Crocs Footwear. Prepared for Crocs Inc."[permanent dead link](PDF) us-ergo.com; U.S. Ergonomics. Archived at Open24.lt. Retrieved June 6, 2010.
  24. ^ "Footwear with APMA Seal of Acceptance" Archived July 21, 2011, at the Wayback Machine. apma.org; American Podiatric Medical Association. October 7, 2009. Note: CrocsRX is a Corporate Partner in American Podiatric Medical Association at the $100000-$249999 contributions level Archived July 21, 2011, at the Wayback Machine. per APMA.org. 2009.
  25. ^ AP (July 18, 2008). "Crocs get a lift from diabetics as medical agency OKs footwear". The Denver Post, based on Crocs press release. Retrieved May 31, 2010.
  26. ^ Snow, Kate (October 5, 2006). "Crocs can pose a danger on escalators". ABC News.. Retrieved April 19, 2007.
  27. ^ a b AP (April 21, 2008). "Kids Hurt While Wearing Crocs on Escalators". ABC Business News. Retrieved November 5, 2009.
  28. ^ "Experts recommend caution while wearing clogs" WMC-TV Memphis Tennessee. September 21, 2006. Retrieved April 19, 2007.
  29. ^ Garrigan, Mary (February 1, 2007). "Holey Crocs get the boot at Regional Hospital" Rapid City Journal. Retrieved April 18, 2007.
  30. ^ Talaga, Tanya (July 24, 2007). "No Crocs for docs and nurses?" Toronto Star. Retrieved June 4, 2010.
  31. ^ AP and Olafson, Joe (July 31, 2007). "Crocs clampdown sparks health-care debate"[permanent dead link]. CTV News.
  32. ^ Foppatofflor is a Swedish nickname for Crocs, after Peter "Foppa" Forsberg, Sweden's Crocs importer.
  33. ^ "Requirements to stop slippers after dangerous incidents" Archived November 13, 2009, at the Wayback Machine.. Dagens Medicin (SE). April 18, 2007. (English translation). Retrieved June 6, 2010.
  34. ^ "Swedish hospital to ban 'Foppatoffels'" The Local (Sweden), April 18, 2007. Retrieved April 20, 2007.
  35. ^ AP (April 19, 2007). "Plastic clogs disrupt machinery in Swedish hospital" Guardian Unlimited (AP). Retrieved April 19, 2007.
  36. ^ "Karolinska prohibits foppa slippers" Archived July 19, 2011, at the Wayback Machine.. Dagens Medicin (SE), April 27, 2007. (English translation). Retrieved June 6, 2010.
  37. ^ SAPA-AFP (August 12, 2008). "Vienna hospitals ban Crocs" Mail & Guardian Online. Retrieved August 13, 2008.
  38. ^ Staines, Richard (March 31, 2009). "New anti-static crocs shoe produced for use in hospitals". NursingTimes.net. Retrieved June 26, 2010.
  39. ^ "Crocs closes on Jibbitz purchase". Denver Business Journal. December 5, 2006. Retrieved May 31, 2010.
  40. ^ "Ocean Minded website". Ocean Minded. August 4, 2008. Retrieved November 5, 2008.
  41. ^ "Crocs will buy Wash. shoemaker". Denver Business Journal. July 30, 2007. Retrieved August 4, 2008.
  42. ^ "CROCS(TM) Inc. Announces Acquisition of Fury". lexdon.com; Lexdon Business Library. January 11, 2007. Retrieved May 31, 2010.
  43. ^ Madden, Mike (July 27, 2009). "Admit it -- you used to wear Crocs - The Brand Graveyard". Salon.com. Archived from the original on May 23, 2010. Retrieved May 31, 2010.
  44. ^ a b Walker, Rob (July 15, 2007). "Croc On". The New York Times Magazine. Retrieved May 31, 2010.
  45. ^ Luscombe, Belinda (July 10, 2008). "10 Questions for Tim Gunn". Time. Retrieved June 25, 2010.
  46. ^ Tuttle, Steve (July 31, 2008). "Culture: Make. It. Stop. The case for ending our long national nightmare". Newsweek/The Daily Beast. Retrieved September 3, 2012.
  47. ^ Tuttle, Steve (August 19, 2008). "Culture: A Croc of ... Wit - Readers lash a rant against the popular rubber clog". Newsweek/The Daily Beast. Retrieved September 3, 2012.
  48. ^ Gilbert, Sarah (June 14, 2007). "George Bush cozy with Crocs CEO: An ugly tide that raises two boats?" bloggingstocks.com; AOL Money & Finance. Retrieved July 7, 2010.
  49. ^ Brandon, Alex (AP) (August 2009). "Style Evolution:Michelle Obama (image 60 of 123)" (Flash). StyleList.com. AOL.com. Retrieved June 26, 2010. During a trip to Martha's Vineyard in August 2009, Michelle Obama went casual in sky blue Crocs. According to the company, she's wearing the Malindi style — and they match perfectly with daughter Sasha's outfit.
  50. ^ Chew, Jonathan (June 24, 2015). "Crocs are in again, by (Prince) George!". fortune.com. Fortune.
  51. ^ Lowin, Rebekah (June 23, 2015). "Crocs sales skyrocket from the 'Prince George effect'". Today.
  52. ^ "The 10 Best and Worst Things to Happen to Men in 2007". Maxim. Dennis Digital Inc. Archived from the original on December 4, 2013. Retrieved November 28, 2013.
  53. ^ Oloffson, Kristi (May 27, 2010). "The 50 Worst Inventions". Time.
  54. ^ "August 24, 2007". Real Time with Bill Maher. Season 5. Episode 105. August 24, 2007. 51.5 minutes in. HBO. "It was only a year ago when only pre-schoolers and mental patients wore these. But now grownups, all over America, have gone Croc crazy. The latest step in our unending quest to dress as casually as humanly possible. You know, I used to wear flip-flops, but they were a little dressy. I want clothing I can hose down! Admit it: we're a nation of slobs who won't be happy until we can go to the mall in a diaper."
  55. ^ "September 10, 2007". The Daily Show with Jon Stewart. Episode 12112. September 10, 2007. 10 minutes in. Comedy Central. ...Oh, and Jon, anyone in those brightly colored plastic Crocs? That means anything goes. We're talking hardcore ass-[censored] stuff — scat play. And Jon, that's not just in bathrooms. Anytime you see anyone wearing crocs, be aware. ... If they're wearing Crocs, they are soliciting incredibly depraved gay sex. You can take that to the bank.
  56. ^ Burcher, Nick (2012). Paid, Owned, Earned: Maximising Marketing Returns in a Socially Connected World. Kogan Page. p. 63. ISBN 978-0749465629. Retrieved September 3, 2012.
  57. ^ Goldstuck, Arthur (November 22, 2007). "I love that damn meerkat, Croc sandals and Ronald Suresh Roberts". Tech Leader. South Africa: Mail & Guardian Online. Archived from the original on September 5, 2011. Retrieved September 2, 2012.
  58. ^ Matyszczyk, Chris (March 14, 2009). "Why isn't the tech world supporting the Woz?". CNET.com.
  59. ^ "Crocs snaps up beach volleyball sponsorship". SportBusiness.com. February 27, 2008. Archived from the original on February 28, 2009. Retrieved September 25, 2009.
  60. ^ Sage, Alexandria (August 10, 2009). "Beach volleyball tour says Crocs ending sponsorship". Reuters. Retrieved September 25, 2009.
  61. ^ "Crocs Inc Faces Lawsuit". Archived from the original on 2012-01-22.
  62. ^ "UPDATE 2-Crocs outlook lags Wall Street, shares tumble". Reuters. October 31, 2007.
  63. ^ TraderMark (August 30, 2009). "67 stocks returning 50%+ this past month". Seeking Alpha. Retrieved September 25, 2009.
  64. ^ Weinstein, Robert (October 18, 2011). "Crocs Earnings: Company Trips On Laces, Falls Face First". SeekingAlpha.com.
  65. ^ Clifford, Catherine (July 26, 2013). "Crocodile Tears? Crocs Blames Earnings Drop on the Weather". Entrepreneur.com.
  66. ^ Antoine Gara. "SAC Capital Takes 5% Stake in Crocs After Blackstone's Bet". TheStreet.com. Retrieved January 1, 2014.
  67. ^ Wallace, Alicia (July 21, 2014). "Niwot-based Crocs laying off more than 180, closing stores in major restructuring". Daily Camera.
  68. ^ "Crocs, Inc. Reports Second Quarter 2018 Results; Diluted Earnings Per Share Increase 75% to $0.35".

External links[edit]