Search online for “hate crocs” and you’ll quickly see why Crocs is eager to transcend the clunky clogs it unleashed on an unsuspecting world 11 years ago.
Bloggers have denounced Crocs as ugly and an escalator-tripping hazard. On YouTube, a woman cuts a yellow pair into pieces and then feeds them to a blender. A Facebook page is called “Let’s Burn Crocs!”
Chief executive John McCarvel is all too aware of the Crocs animus and how it complicates his strategy to attract new customers and double sales in five years. The clogs generate 47 percent of sales because lots of people like them, especially medical professionals and kids.
Yet to hit his target, McCarvel must persuade the haters to buy the company’s other footwear. That’s why Crocs is telling the world all about its wedges, sneakers and leopard-print ballet flats – and hiding Crocs in the back of stores the way grocers do with milk.
“Our milk is those clogs,” McCarvel said. “If someone wants them, make them walk through all the new stuff first.”
McCarvel, who became chief executive in March 2010, has been credited with helping revive the Colorado company and making it profitable again.
Although sales rose 12 percent last year to $1.12 billion and net income was the highest since 2007, investors are wary.
Crocs plans to open in 90 places around the world this year, with about half in Asia, where sales jumped 34 percent in the first quarter. That would boost total sites by 20 percent to more than 500. Crocs had about half that in 2011.
“I don’t doubt they need to have stores in different parts of the world,” said Sam Poser, an analyst at Sterne Agee & Leac in New York, who also recommends holding the shares. Given that same-stores sales fell 5.2 percent in the most recent quarter, Crocs needs to improve existing locations “before opening a ton of new stores”, he said.
Foreign markets are key to the company’s growth, McCarvel said.
He pointed out that Crocs had little presence in several warm regions, where the opening of stores could help it have less of a seasonal business because in places like Kuwait and Brazil people wore sandals year-round. The Middle East, Central America and South America account for only about 8 percent of sales.
Crocs isn’t relying only on hot climates to keep growing. The company has done well in Russia because shoppers there didn’t get to know Crocs as the ugly clog company – they first embraced its fur-lined boots, McCarvel said.
In China, where sales will pass $100 million (R991m) this year, Crocs are known more as an American brand similar to Starbucks without the fashion faux pas history, says McCarvel, who joined Crocs in 2004 and led its Asia expansion before becoming chief executive.
“There’s a much bigger audience out there,” Swartz said.
To grab it, Crocs has increased its global marketing budget by 30 percent this year and is using such slogans as “A Shoe For Every You”. The aim is to become a lifestyle brand, introducing potential customers to the brand’s more than 300 styles and convincing those who think they know Crocs that they don’t.
The cover of a catalogue shows a couple sitting on a wooden boat. Grinning while in a half-embrace, their legs dangle over the side, drawing the eye to their Crocs docksiders. The following pages are filled with sandals and loafers. Clogs aren’t featured until the back.
To succeed, Crocs will surely need more customers like Jodi Karr. The 33-year-old bartender with tattooed arms recently visited a Crocs store in Toronto’s trendy Queens West neighbourhood to buy another pair of navy blue sandals.
“People never think I’m wearing Crocs. They just think about those original clog Crocs. I love these things, though.” - Bloomberg News