Crocs

**Crocs, Inc.** (stylized in all lowercase) is an American company based in Broomfield, Colorado that manufactures and markets the Crocs brand of foam clogs.

The company has since established a considerable following with American middle school and high school students, with many opting for Crocs to use as shoes for the school day.

## History

Crocs was founded by Lyndon "Duke" Hanson, and George Boedecker Jr. to produce and distribute a foam clog, whose design they acquired from Foam Creations, Inc. of Quebec City. The shoe was originally developed as a boating shoe. The first model produced by Crocs, the *Beach*, was unveiled in 2001 at the Fort Lauderdale Boat Show in Florida, and the 200 pairs that they had produced were all sold. Crocs has since sold 300 million pairs of shoes. In June 2020, Crocs moved the headquarters from Niwot, Colorado to Broomfield.

Crocs completed the initial public offering of its common stock in February 2006. It began trading on the NASDAQ Stock Market under the symbol CROX. On October 30, 2007, the stock dropped 24% when the company announced decreased revenue projections. On April 14, 2008, during the midst of the financial crisis of 2007–2008, the stock dropped 30% in after-hours trading after the company issued a press release in which they significantly decreased earnings estimates for the first quarter. In the same statement they also said they would lay off its 600 Quebec City factory employees as retailers have been reducing orders, though about 100 sales and marketing positions would remain. "The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed," chief executive officer Ron Snyder said. During the financial crisis, CROX dropped to as low as $0.79 before rebounding ($15.50 by November 2010). On October 18, 2011, Crocs stock suffered a single day drop of about 39.4% on lowered earnings and revenues forecast.

In June 2013, Crocs reported a 42.5% decrease in net profits from a year before. As a result, the stock fell 20.2% in one day.

In December 2013, the hedge fund SAC Capital Advisors disclosed that it held a 5% stake in Crocs, just over a day after The Blackstone Group said it would invest $200 million in a convertible preferred stock offering that would allow the company to replace its CEO and buy back $350 million in stock. In a filing with the U.S. Securities and Exchange Commission, SAC Capital management said it had accumulated a 5% passive stake in Crocs.

On July 21, 2014, Crocs Inc. announced a restructuring plan to streamline its operations and workforce by eliminating 180 jobs, close 75 to 100 stores (out of 624 worldwide) as well as scrapping underperforming product lines. Crocs has previously eliminated 183 positions, including 70 current and planned positions in its corporate headquarters in Niwot, Colorado. Crocs also announced they would open a "global commercial center" with 50 to 75 employees in Boston, Massachusetts in 2014, for merchandising, marketing and retail functions. In August 2018, Crocs announced it was closing its last company-operated manufacturing plants in Mexico and Italy.

## Acquisitions

An American pair of stylised Crocs, meant to symbolise the flag of the United States
In October 2006, Crocs Inc. purchased Jibbitz, a manufacturer of accessories that snap into the holes in Crocs shoes, for $10 million, or $20 million if Jibbitz met earnings goals.

In January 2007, Crocs acquired assets of Ocean Minded for $1.75 million in cash, plus potentially $3.75 million based on performance. Ocean Minded makes leather and ethylene-vinyl acetate-based footwear. In July 2007 Crocs agreed to buy shoe- and sandal-maker Bite Footwear, based in Redmond, Washington for $1.75 million, or up to double that based on earnings results.

In April 2008, Crocs acquired Tidal Trade, Inc. ("Tidal Trade"), the company's third party distributor in South Africa, for $4.6 million. The company recorded $1.4 million in customer relationships on the date of acquisition. Crocs repurchased inventory previously sold to Tidal Trade and accordingly recognized a reduction of revenue of approximately $2.1 million. Also in April the company acquired Tagger International B.V. ("Tagger"), a private limited liability company incorporated under Dutch law that manufactures messenger bags. Tagger was partially owned by the Managing Director of Crocs Europe B.V. The company acquired all Tagger assets for $2 million – $90,000 for inventory and $1.9 million for the Tagger trademark. Later in June, Crocs liquidated Fury, Inc. two years after acquiring it, after efforts to sell it off were unsuccessful. As a result, Crocs wrote off $250,000 related to the remaining customer relationships, intangible assets and trademarks over three months.

In February 2022, Crocs acquired the Italian shoe company HEYDUDE for $2.3 billion, as well as issuance of stock to one owner of HEYDUDE.

## Manufacture and patents

In June 2004, Crocs purchased Foam Creations and their manufacturing operations to secure exclusive rights to the proprietary foam resin called Croslite. Croslite is a closed-cell resin, described by third parties as an injection-moulded EVA foam. The foam forms itself to a wearer's feet and offers purported medical benefits, according to a number of podiatrists. Crocs holds a patent applied for under the title "breathable workshoes and methods for manufacturing such", and three design patents covering various ornamental aspects.

As of 2007, the company had applied to register "Crocs" and the Crocs logo as trademarks in over 40 jurisdictions around the world, including the U.S.; many such applications were pending approval. Crocs also extended the scope of their trademark registrations and applications for both the Crocs mark and logo to cover non-footwear products, such as sunglasses, goggles, knee pads, watches, luggage, and some of their Internet sales activities.

## Products

White Crocs with Toy Story alien *Jibbitz* added

Crocs are made in a variety of styles and colors. The Classic styles are available in more than 20 colors; most other styles are produced in a palette of four to six colors or two-color combinations. Thus there are different styles for each season. A pair of adult Classic style Crocs normally cost $49.99.

Crocs also sells other fashion accessories. *Jibbitz* are decorations that can be clipped to the ventilation holes in the shoes. These include designs, mainly aimed at children, which mostly feature Disney characters. *Jibbitz* normally cost $4.99 for a single clip or $16.99 - $19.99 for multipacks. The company has also released a line of purses in a variety of colors.

A "Fuzz Collection" with woolly liners extend the brand's range to winterwear. A pair of adult Crocs from the "Fuzz Collection" normally cost $59.99 - $64.99.

In 2008, the company entered the golf shoe marketplace by acquiring the golf shoe manufacturer Bite Footwear and introducing a Croc-styled pair of golf shoes, the *Ace.*

In 2020, in response to the COVID-19 pandemic, the company launched "A Free Pair for Healthcare" offering healthcare workers a free pair of their shoes. Crocs also sent 100,000 pairs of shoes to hospitals to be distributed to staff.

## Partnerships & collaborations

Crocs were in the public eye in 2021 with celebrities like Nicki Minaj and Justin Bieber modeling the shoes on social media. Crocs were popular on social media like Tik Tok, as well.

Crocs collaborations are announced on a regular basis, with individuals and brands designing their own limited edition versions. In 2021, they partnered with The Smiley Company to launch a special edition croc.

## Imitations and counterfeits

Crocs announced in 2006 that it filed complaints with the United States International Trade Commission (ITC) and the United States district court against 11 companies that manufacture, import or distribute products, called "croc-offs", that Crocs believes infringe its patents. Seizures of counterfeit Crocs occurred in 2007 in the Philippines and Denmark, and were under litigation in South Africa. In 2010, the United States Court of Appeals for the Federal Circuit held that Crocs' design patent had been infringed.

In 2007, the U.S. Consumer Product Safety Commission requested a voluntary recall of Crocs-like clogs due to a potential choking hazard involving detaching plastic rivets.

Crocs-like brands include Airwalk, Crosskix, Poliwalks, USA Dawgs/Doggers, Veggies, among others. Versions of the Croc style clogs have appeared in children's fashion catalogs, usually under their own name brands or as no names. Other knock-offs are in discount stores, amusement park stores, beach stores, department stores, and superstores.

## Health and safety

Escalator safety sign warns: "Take extra care when wearing soft plastic shoes"
Some Crocs shoes were tested and recommended by the U.S. Ergonomics company in 2005 and were accepted by the American Podiatric Medical Association in 2009. In 2008, the U.S. government Centers for Medicare and Medicaid Services approved a model of Crocs with molded insoles as diabetic footwear, to help reduce foot injuries.

Footwear such as Crocs and flip-flops came under scrutiny in 2006 in the U.S. and 2008 in Japan when children suffered injuries after the shoes became caught in escalator mechanisms. This was due to the soft shoe material combined with the smaller size of children's feet. In 2008, Japan's Ministry of International Trade and Industry, after receiving 65 complaints of injuries, requested that Crocs change its design.

Internationally, some healthcare facilities introduced policies in 2007 regulating Crocs. Rapid City Regional Hospital in South Dakota changed its dress code to prohibit the sandal variants and those with holes, citing safety concerns, but allowed closed-top "Professional" and the healthcare-focused "Rx" Crocs to be worn. Over 100 hospitals in Canada were advised to implement similar policies. Blekinge and Karolinska University hospitals in Sweden banned the wearing of "Forsberg slippers" (*Foppatofflor*) by staff, due to high voltage static electricity buildup which was observed to interfere with electronic equipment. City hospitals in Vienna, Austria announced banning Crocs, often worn by nursing staff, to comply with antistatic requirements.

Crocs announced the Fuse and two others in 2009, formulated to dissipate static electricity in accordance with European standard EN ISO 20347:2004 (E), for use in the medical sector.

## Cultural influence

In a 2007 episode of his TV series, comedian Bill Maher stated, "New Rule: Stop wearing plastic shoes."
Starting in 2006, sales of Crocs increased dramatically, with first-quarterly sales roughly tripling from 2006 to 2007, according to *The New York Times*. An article in *The Washington Post* described the phenomenon: "Nor is the fashion world enamored of Crocs. Though their maker touts their 'ultra-hip Italian styling,' lots of folks find them hideous." Tim Gunn, fashion consultant, told *Time* magazine, "... the Croc – it looks like a plastic hoof. How can you take that seriously?" A 2008 anti-Crocs essay by Steve Tuttle in *Newsweek* generated much response from readers who both agreed and disagreed with it.

In 2007, then-President George W. Bush wore black Crocs with socks publicly. In August 2009, First Lady Michelle Obama was spotted wearing Crocs with her daughter. On June 14, 2015, 23-month-old Prince George, son of Prince William and Kate Middleton, was photographed at a charity event wearing navy blue Crocs. After one week, this had created a 1,500 percent increase of sales, according to a spokesperson for Amazon.com.

Crocs were ranked #6 on the "Worst" list of *Maxim*'s "The 10 Best & Worst Things to Happen to Men in 2007." In May 2010, *Time* magazine listed Crocs as one of the world's "50 Worst Inventions".

The shoes have been targets of satire: on *Real Time with Bill Maher*, Maher called for a "New rule: stop wearing plastic shoes," and *The Daily Show* "Senior Public Restroom Correspondent" Rob Corddry, following up on the Senator Larry Craig June 2007 lewd conduct arrest, "reported" that anyone wearing Crocs is signalling "anything goes".

The blog *IHateCrocs.com* was founded by two Canadian college students (Kate Leth, one of the founders, referred to the shoes as "hideous"), while the website *CrocFans.com* documented uses of the shoes. The Facebook group *I Don't Care How Comfortable Crocs Are, You Look Like a Dumbass* has been mentioned in the media.

Crocs was the title sponsor of the Association of Volleyball Professionals (AVP) Tour from 2006 through the 2009 season.