2018 was not a good year for Crocs. The company announced it would close all of its manufacturing facilities, as well as 160 of its retail stores. Crocs’ CFO resigned, and it appeared the brand would be something people referred to as “Remember when Crocs were a hot item?”. However with a little creativity (and some luck) brands can make a comeback. Crocs has shown the market that it might have been down, but it was not entirely out of the market. Crocs reported Q2 2022 consolidated revenues of $964.6 million, an increase of 50.5 percent year-on-year. Income before taxes reached $214.3 million, up 12.5 percent. For full year 2022, the company has forecast consolidated revenues to be approximately $3.395 to $3.505 billion, representing growth between 47 percent and 52 percent compared to 2021. The company says its fourth straight year revenue growth is fueled by continued global demand and it expects revenues to grow to over $5 billion by 2026. <h3><b>Rethinking Its Role</b></h3> To reconnect with consumers, Crocs started to lean into heavy collaboration and constant new product releases, in order to put themselves in front of people that might not have previously considered buying Crocs. This was further supported by the ‘pandemic bump’ which was a boon to any brand that offered comfortable apparel for the new work-from-home consumer. In 2019 Crocs CEO Andrew Rees set the company on its path to recovery, making Crocs buzz-worthy again. He signed collaborations with PizzaSlime and Takashi Murakami which helped the brand regain a trendy edge and get some much needed publicity as something that was cool to wear. The brand also reclaimed much needed wholesale distribution key retailers, as well as growing online sales. <h3><b>From Hero to Nearly Zero</b></h3> The company started off in 2002 providing functional footwear to people who worked in kitchens, hospitals, and other professions where comfort and dependability are needed. Crocs may not have been fashionable, but the shoes were incredibly useful. Like so many other functional products, they developed a cult following that in turn made them fashionable. Part of what makes Crocs so functional is the material they are made from, a proprietary closed cell resin called Croslite that is slip resistant, lightweight and easy to clean. Producing a molded shoe is easier than making a more complicated sneaker. Add to that scale and Crocs had a competitive advantage at the manufacturing level, as well as becoming trendy. By 2005, Crocs sales took off. In the first three quarters of 2005 It sold 4.4 million shoes having a revenue of $75 billion. Part of the reason for its initial success was that the shoe was easy to get. They were available everywhere - at retail stores, gift shops and mall kiosks. In 2006 Crocs purchased Jibbitz, a company that makes small plastic shoe charms. That same year Crocs went public and became the largest ever US footwear IPO at the time. Two years later the company hit a wall. In 2008 in the midst of the financial crash, the company suffered a net income loss of $185 million. Though the initial hype around Crocs had faded, the brand’s global presence enabled it to retain a fairly large customer base. The company closed its own factories and instead outsourced production. It also cut about 30-40 percent of the styles they offered. <h3><b>A Lucky Charm That Recharged Sales</b></h3> Crocs comfort aspect is what many point to as the key to its success. But another important factor is how easy it is to customize the shoes with Jibbitz charms. The timing was perfect. Consumers were moving away from wanting to wear what everyone else wore to wanting greater personalization. Jibbitz gave consumers lots of options - and it enabled them to update older Crocs too. They became like the key chains kids would put on their backpacks. This idea of individuality and self expression is one that the brand emphasizes through its marketing campaign. And on social media, the uniqueness of the shoes design has sparked debate. Some people saw them cute and fun, while others simply found them ugly. Crocs leaned into this polarization. They partnered with celebrities and well known brands to create limited edition versions of their classic clog. <h3><b>Collaborations Drive Design - and Publicity</b></h3> One of the biggest shifts within the fashion world in the past decade is that people truly seem to design for Instagram. Brands and retailers want to stop people from scrolling and certainly a shoe plastered with fries does that. In 2021 Crocs partnered with more than two dozen brands, artists and creators through collaborations and licensed programs. Constantly releasing new collaborations has not only kept Crocs in the press, but it has also helped to break into new markets. There are now Croc collectors that want to purchase every model. The same way that Nikes resell on websites like Stock X and eBay, Crocs are now reselling - with certain models commanding luxury prices. In February 2022, Crocs acquired Italian brand HEYDUDE, which designs comfortable, versatile and accessible footwear and accessories. At the time of the acquisition, Crocs said, “HEYDUDE adds a second high-growth, highly profitable brand to the Crocs portfolio. We intend to leverage our global presence, innovative marketing and scale infrastructure to grow HEYDUDE and create significant shareholder value. In Q3 2022, Crocs forecast its Crocs Brand revenues to reach $680 to $700 million (+15-18%) and HEYDUDE Brand revenues of approximately $235 to $255 million. The company has not forgotten its roots in functional footwear. Crocs still offers a collection specifically for those professionals that were its original customer base. While Croc might start to plateau, at least for now they have once again convinced consumers that they deserve a place in their wardrobes.