Crocs Case Study

In: Business and Management

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CROCS,INC.

Crocs, Inc. is a designer, manufacturer and retailer of footwear for men, women and children. Crocs uses its proprietary closed cell-resin, Croslite, to make shoes that are comfortable, lightweight, water-resistant and odor- free. The Company was founded in 1999, began marketing and distributing footwear products in 2002 and completed its initial public offering in 2006. Revenues have grown from $1.165 million in 2003 to its peak of $847.350 million in 2007 and then it came a 36% decline in its stock price, to a closing price of $47.74 per share after Oct.07 2007. Since its introduction in 2002, Crocs products were distributed more than 11,000 domestic store locations and were sold in over 90 countries worldwide in five years.

Crocs’ growth took off and the Company began preparing to go public in 2005. Crocs launched its first national advertising campaign and was recognized as "Brand of the Year" by Footwear News. Crocs completed its IPO of 9.9 million shares on February 8, 2006 at $21 per share. Crocs raised $207.9 million in the largest IPO of a footwear manufacturer up to that time.

In 2006 and 2007, Crocs expanded exponentially - fueled by organic growth as well as numerous acquisitions. They acquired new brands, such as Jibbitz and Ocean Minded, added a clothing line made with Croslite and began selling children’s shoes. Due to growing demand, they increased production capacity through their own manufacturing facilities in Canada, Mexico and Brazil and also employed contract manufacturers in China, Italy and Romania. However, things took a turn for the worse in 2007. Revenue growth slowed in the forth quarter and Crocs experienced a loss of $2.2 billion.

Crocs experienced rapid revenue growth and had difficulty meeting the demand for its footwear products from the Company’s inception to the year ended December 31, 2007. In fact, many…...

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