Crocs Stops Manufacturing: Is It the End of the Brand?
The company Crocs has decided to shut down the manufacturing plants and now the availability of Crocs is at questionable stake.
It’s time to say goodbye to your favorite Crocs. Sad but that’s true. Crocs announced that they would be closing all the manufacturing plants soon. Good or bad, it’s a personal choice but having such a news from a big brand like Crocs, is definitely shocking. The iconic design of Crocs stepped into the land of shoes in 2002 and very soon the foam clog became a global hit for the super comfort and manufacturing brilliance. As per reports, there has been a downfall of the sales records and that has made the authorities decide to close the manufacturing. Around 28 retail locations will be affected due to this decision of the manufacturers.
The opinion on the design of the shoes varied. There were as many haters as many fans. Some said that the design is ugly and some went gaga over the shape and comfort. Being a clog lover myself, I would say that the color and the comfort are amazing and if the brand goes off the market, a real disappointment will be there among the lovers of clogs like me. A large section of people who were all day working on their ‘feet’ said that after they started wearing these shoes they are not willing to switch. Among these sections, restaurant workers and hospital employees are included. The divide of the customers reached a level of celebrity favorites as well. On one hand, President George Bush and Michelle Obama were seen sporting Crocs collections and on the other hand, Tim Gunn was there, opposing the design vocally calling it as one of the “Worst Inventions”. But now there is the end of love and hate as this old friend or foe is soon to end its tenure.
The journey of Crocs
The reports say that the sales hit has made the authorities decide that they would stop manufacturing. But this is not the first time that the brand has gone through rough days, but has always made a comeback. In 2009, the brand was close to bankruptcy. Sources say that going through a series of mistakes had led them to bankruptcy but soon the brand took a very good turn and improved the sales records and the distribution expanded greatly. The clog sales were so high that the company extended, but the sudden recession was again a backlash.
The inventory was overflowing as the retailers were not accepting the brand in their stores telling that the customers are not wanting them. To cope with the situation, Crocs started opening their own store. The distribution was poor and thus this step was their way out. Plus, not in every location, the store was a hit. Sources say that there was a discrepancy in the planning. The clog being the USP product had their stores in places where there were lesser chances of sales. For instance, keeping clogs in a cold weather is not at all a good option as per experts, because clogs are mainly meant for warm weather. Mitch Kummetz, an analyst at Pivotal Research Group said in this context, “ The stores were a real drag to the business in those colder weather months where people aren't looking to buy Crocs.”
After $200 million investment in private equity and the intervention of the new management, many Crocs stores were shut down. The factories were closed and some stores had their controls transferred. All these were done to save money. As per reports, the factory of Mexico was closed in May. During that time there was the beginning of the planning to quit as the brand thereafter wanted to end the production in Italy. Italy was the final plant that was left and closing that technically meant the end of Crocs. Experts are saying that the production will only continue if the product is outsourced from China and Vietnam.
In 2017, Andree Rees became the chief executive of Crocs. As per sources, his focus was on the areas where the products were underperforming and keeping the inventory low. He pushed the production of sandals and flip flops having interesting graphics and various colors. Other than this, he also focused over the regular clogs which were the specialty of Crocs. The strategy worked at some levels as there were reports of relevant shoppers and the retail store profit upheaval.
Drew Barrymore’s video influenced a lot on the sales of Crocs. The music video featuring the star was seen endorsing the brand where she sings "Just get comfortable in your own shoes." It showed the versatile collection of the brand and as per reports the after this video running as ads, there was close to 18 million sales of shoes which were a huge hike from the last records. As per records, this video of Barrymore was one of the most viewed ads. Going by the reports produced by the company, there was an increase of 18% for sandals and the clog sales saw a hike of 11.4%. Though the manufacturing has stopped, Crocs claim to remain in business. The company believes there is still the possibility of $23 billion in sales from sandals. One of the officials said, “We will continue to focus on molded footwear, particularly clogs and sandals, which are the best reflection of Crocs DNA.”
The declaration of the close down was done on Tuesday. Soon after the share rates dropped by 2.65 %. But again by Thursday, the stocks rose by 3%. Thomson Reuters tracked consensus estimate it Crocs has been able to beat that. As per the reports, the earning made by Crocs from its share is 35% for each share. For the quarter, the revenue that came in is $328 million. The estimate of FactSet surpassed the figure. The estimated was $321 million. Despite the news of the closures if the manufacturing wings of the brand, the company is expecting a good outcome in the third quarter as well. They are estimating a revenue somewhere between $240 million and $250 billion.
Critics say expecting such a number is not possible when the company is set to close its manufacturing wings. Some are predicting if such an estimate is being given by the brand then the inventory must be stocking products and will release as per the demand. There are even speculations about some new product that will be launched after a tie-up with any other leading brand or retailer. The outcomes are yet to come but the users of clogs will be really disappointed if the production ends here.
Last month the negative remarks about Crocs heels took the Twitter by storm. The people made sarcastic remarks about the brand and said it was simply a bad idea to launch the heel version of Crocs. People never failed to express their strong dislike for the product. While there was even a woman who focused on the fact that heels are nothing new that is to be made a fuss about as she has been using one for the last two years and is working absolutely fine for her.
The users are now in a big dilemma whether or not the brand will be available in the market. Some are labeling it as a comeback strategy while some are thinking it as the end of an iconic footwear.
Source:
https://money.cnn.com/2018/08/09/news/companies/Crocs-clogs-sandals/index.html