Crocs had their day in the sun. No one can forget those blisters. The sun set on those days, but it has risen again.
A mostly irrelevant stock since before the financial recession of the late 2000s, Crocs popped 13% after Justin Bieber posted this photo on Instagram at the beginning of October — sending Crocs to its most valuable point since early 2008.
The Original Rise of Crocs 🐊
In the early days, Crocs were designed for boating. They’re water resistant, easy to slide on, and made from to encourage comfort. Its patented material Croslite is lightweight and designed to spread impact across the foot, while not absorbing water or sweat, making it bacteria resistant. With this in mind, it’s easy to see why people like nurses or chefs might like the shoe for practical purposes.
All of this is good and well, but fashion knows no boundaries. A few years after its inception, Crocs became… fashionable?
The middle of the 2000’s, Crocs started appearing in the mainstream. Celebrities like Rosie O’Donnell and Jared Leto became Crocs enthusiasts. Public opinion quickly split, but there were a percentage of people who acknowledged Crocs as fashionable.
As quickly as they rose, Crocs began to decline. This can be seen in 2008 when a number of factors likely contributed to decline. Firstly, the shoe was highly scrutinized for its appearance, so anyone who wanted the shoe for comfort probably didn’t want the stigma. Secondly, a recession was beginning, and a pair of bright pink clogs probably weren’t a necessary purchase. Thirdly, the shoe is durable. People who already had a pair didn’t need to rush out for a second.
Then, there was a rebound in sales and a slight increase in net income. This is due to the brand opening more retail stores across the world. People knew Crocs existed, they knew there were a lot of options, and they could get them almost anywhere. Mass exposure resulted in more people buying shoes, but it also meant the brand needed to strategize its investment in retail.
The Second Coming of Crocs 🐊
A decade after its initial rise in popularity, Crocs was hitting a low. In 2017 I began to see Crocs reappear in public. It wasn’t just on nurses and toddlers, the clogs were getting embraced by Gen Z.
Of all the things in the world, why would Crocs become a fashion trend for a new generation? It actually seems like Crocs should have been a trend embraced by the hipsters of the world, the people who ignored popular opinions in favor of comfort and personal statement.
Meanwhile, Gen Z seems to be embracing trends of the 90’s, athleisure, and environmentally conscious products. Crocs don’t check any of those boxes, but once again, fashion proves it knows no boundaries. It appears every generation has a little counterculture baked into their fashion trends. People take products deemed ugly by prior generations and turn them into fashion. Remember all of the big, thick glasses we saw around 2008? Now we’re seeing a lot of big, thick shoes.
Crocs did something right, and the closure of retail stores demonstrated a realignment in strategy. They probably leaned into their reputation a little more while embracing the fact that they’ve become somewhat of a meme.
Digital sales for Crocs grew 35.5% and now represent 37.7% of revenue — a 5.5% growth over last year. Retail comparable store sales also saw success, growing by 16.2%.
Overall operating income for the company grew a whopping 80.7% with operating margins jumping to 19.9%. All these positive numbers led Crocs to a 78.4% year-over-year growth in diluted earnings per share — $0.91 from $0.51. Crocs is also setting growth guidance of 20–30% growth in revenue in the fourth quarter.
Whether the Crocs resurgence is a fad is a fair question. It’s a fair question for any clothing or shoe brand growing the way Crocs has over the past year. The company has rediscovered its market through star influencers, though. As long as collaborations with megastars continue, Crocs will always be able to garner intrigue.
StockX, a popular sneaker resale app, has seen sales of Crocs increase dramatically over the past three months, according to the app’s senior economist, Jesse Einhorn. The shoe’s sales are outpacing the rest of the sneaker market by more than 8x.
Average StockX resale prices of the shoes have increased 80% since January, with some of the popular collaborations reselling for $200 or more on average. Some asking prices are much higher than that.
As other popular clothing and shoe brands seek to recreate their own version of the shoes, the Crocs revival may fizzle out over time.
For now, though, Crocs has a handle on the comfortable shoe market and continued dedication to large collaborations will only allow the company to pick up even more momentum moving forward.