Brûlons les crocs!!! (Deux) ~ Brand Mix

Tuesday, September 2, 2008

Brûlons les crocs!!! (Deux)

Good news for all you Crocs-haters out there. It looks like the Crocs' goose may be cooked. Its share price has fallen to around $4 a share from a high of $75 and the company has just reported a 95% slide in profits in the last quarter.

Ron Snyder, president and CEO of the shoe manufacturer, said in a statement that despite the company’s financial results: “We continue to be confident about the strength of the Crocs brand and we remain optimistic about the future potential of this business.” Yikes. That bad.

When I wrote about Crocs last September I said: "The challenge for the Crocs management team will be how to handle things once this first wave of growth starts tailing off (as it inevitably will). Can they prevent Crocs becoming a passing fad? Can they look for new growth opportunities without compromising the initial, simple, focused product proposition?"

This is clearly the critical time and the answer, so far, looks like "no." Sales fell 20% vs. last year in the last quarter despite a whole slew of marketing efforts including new TV advertising, beach volleyball sponsorship and new products (high-heeled crocs anyone?). But for some success in overseas markets, things would be even worse.

Is there such a thing as a new company being too successful? Was the initial surge of Crocs sales sowing the inevitable seeds of future demise? Fast growth can be very difficult for small companies to manage their cash flow--perhaps it's just as difficult for them to manage their brands too.

Links:
1) Crocs were the biggest fashion crime of 2007: official! thefashionpolice
2) Make. It. Stop. Newsweek

2 comments:

BIG Kahuna said...

Martin, thanks for slipping me in your best of politics.

Crocs was a fad, period. They did nothing to bring the brand forward. But hey, they at least made piles of cash for a while.

I for one can't wait for those ugly things to go away!

Joy Levin said...

Crocs "style" shoes are still very ubiquitous - I don't think the shoes themselves will go out of style. I think that the problem with Crocs is that the company never established value for their own brand, and therefore became vulnerable to knock-offs.

 
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