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Global expansion comfortable fit for Crocs
Boulder County Business Report, Mar 18, 2005
Shoe sales growth leading to new products
NIWOT – With more than half a million already sold, Niwot-based Crocs Inc. appears to be hoping its shoes soon may be as common as, well, McDonald’s hamburgers.
The slip-on shoes with a rear handle that seem to defy traditional fashion barriers of age, gender and utility have been storming ahead in the market, with new colors, styles and a host of international manufacturing facilities already in the pipeline. And, as if continuing to fly in the face of fashion business, leading the way is a recently retired electronics executive.
“Who would of thought that we would change the landscape of the footwear industry?” queried new Chief Executive Ron Snyder, who co-founded a Niwot-based electronics company, the Dii Group, in a previous business incarnation. “We’re in a very good position, and it feels very good right now. Customers young and old, and near and far, love our shoes.”
Snyder helped grow Dii from a $20 million to a $17 billion company, and the Niwot firm ultimately merged with Flextronics in 2000. Snyder came on board at Crocs Inc. as president last year and was named chief executive this year, taking over from founder George Boedecker Jr., who remains as a board member and marketing consultant.
“It is different in that it’s in the fashion arena, and you have that to deal with,” Snyder offered. “But it’s really not that much different than designing cell phones and printers that have a six-month shelf life.”
High school buddies Lyndon “Duke” Hanson and Boedecker, friends from Fairview High School days in the late ’70s, initially found the product marketed as a boat shoe, but loved the “closed cell resin” that makes the shoe grip so well and also resists retaining odors. Fellow buddy Scott Seamans redesigned the shoe to include the rear handle and from there it’s been nothing but success for the Niwot company, formerly known as Western Brands.
Snyder was also an old-time Boulder friend, who came on board to help the rather familial firm cope with its astounding growth in 2004. The company also added Caryn Ellison, former president of Broomfield manufacturer Classic Sport, as a chief financial officer this year.
Crocs Inc. bought Fin Project, an Italian firm with Canadian manufacturing facilities, for an undisclosed sum early last year. That purchase gave Crocs the proprietary rights to the materials and design, as well as a leg up on manufacturing capability.
But with more than 1,000 percent sales growth in 2004, and sales expected to double or triple again this year, Crocs has secured manufacturing facilities in China and Mexico, as well as Italy and Canada.
“We’re in the middle of a pretty aggressive domestic expansion. We’ve been working on that for a number of months,” Snyder said. “We’ve moved into all 50 states. (Previously) we were really actively selling in 10 to 12 states.
“We’re distributing through Nordstrom’s, Dillard’s, Sports Authority and REI, and we’ll be announcing a number of other major chains in the next few months.”
Crocs recently expanded into Europe, Japan, Southeast Asia and Australia, and Snyder had just recently returned from the Land Down Under in mid-February.
“We had just launched a bunch of stores, and we already have orders flowing (from Australia,)” he said.
Australia would seem to be a natural for the shoes, given the sheer number of water-sports enthusiasts there. But everywhere the shoes are being sold, “It’s their comfort and the ease of slipping them on and off that make them popular,” Snyder said.
This year, Crocs will be producing a large line of children’s sizes and the shoes now come in 17 colors. But with the new manufacturing facilities, the company soon will be expanding new lines of shoes for its closed-cell resin material, as well.
“Last year, almost all of our product came from the Canadian manufacturing facilities,” Snyder said. “Now we’re introducing a line of flip-flops and rain boots.”
The shoes have been heralded as perfect for wet-wading fly anglers – that usually means wading in shorts and shoes or sandals – and the company is looking into products specifically for fly-fishing products.
The Canadian manufacturing facilities are producing a number of other products, such as hot-tub pillows and boating seats from the resin under the name “Foam Creations.”
The company has made do with the initial $10 million, raised mostly locally by the founders, and is growing the business almost totally through revenues. Snyder said that would continue to be the business plan for the foreseeable future.
Snyder also left open the door for other business reorganization, including going public.
“We’re always looking at options,” he said. “We won’t impede growth. If we need it (additional financing), we will definitely go get it.”
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