Sunday, May 06, 2007
Is the Crocs fad over?: I don’t think so
Sales of Crocs almost quadrupled in the first quarter of 2007. Crocs, Niwot, Colo., have reported a net of $24.9 million, or 61 cents per share, for the quarter ended March 31. In the same quarter last year, Crocs' net was $6.4 million, or 17 cents per share. Crocs have become the one of the most successful shoe lines ever in its short history. The company started selling its shoes in 2002. The lightweight shoe became a hit with the beach and boating community despite their unusual look. Sales growth exploded as they gained popularity with the fashion conscious and then the mass market. Its appeal has also crossed international borders with Crocs now available in over 80 countries through more than 8,000 retail venues. By the end of 2006 there were more than 27 different styles using Croslite technology. These included boots, slippers, flip-flops and shoes for all-terrains, in addition to traditional sandals. Based on the phenomenal success of CROCS, competitors have launched copycat products, but according to experts, unlike most fashion fads, which simply convey a specific style or design that consumers are attracted to for a brief period of time, the key to Crocs' longevity is the technology behind its Croslite resin. Although it isn’t patented, the exact formula is a closely guarded secret. Additionally, the continual diversification of its product line is drawing more consumers by expanding the beneficial properties of the resin beyond its classic sandal design and allowing the company to keep up with changing fashions trends. Since the beginning of 2007, the company has signed a licensing agreement with Nascar and expanded existing deals with the National Football League and the National Hockey League. It also signed licensing deals with Nickelodeon and Warner Bros., which allows CROX to sell shoes featuring well-known characters such as Dora the Explorer, SpongeBob Squarepants, Superman, Batman and other famous DC Comics superheroes.