After stomping all over the earth, Crocs are suddenly going extinct.
July 29, 2009
Shedding Crocodile tears…
File this under what goes up must come down: Crocs are going extinct! It seems only last year everyone was buying, talking about and otherwise going gaga over these colorful, indestructible, waterproof shoes.
Not anymore. According to the Chicago Tribune, Crocs lost almost $200 million last year and slashed roughly 2,000 jobs. They have until September to pay off their considerable debt. Otherwise they’re “toast,” said a fund manager quoted in the Tribune.
Crocs were born in a boom, with an eye-catching look and a cute 21st century story to boot. According to the Trib, a group of friends in Boulder got hold of some funky foam formula from Canada and created a water-sports shoe they named Beach. A cult following quickly developed, one thing lead to another, and the next thing you know old Jed’s a millionaire!
What happened? Well, I guess the downside of indestructible shoes is that you never have to buy new ones. Huge planning costs incurred just prior to the recession also hurt the company.
Regardless, I am always bewildered by these stories: People, places and things that reach the highest highs only to plumb the deepest depths. Krispy Kreme Donuts. Cabbage Patch Dolls. Hootie and the Blowfish. And now Crocs. Why are their stories so transient while other successes stay red-hot? Apple computers, Starbucks and Bruce Springsteen keep on keeping on. Sure, they have down periods (Starbucks is in the midst of one now) but they’ll be back, maybe stronger than ever.
Last month I wrote that maintaining relevance is a key driver to sustainability. Brands do this via new products, new uses, and new communications.
Still, Crocs was implementing these strategies and none of it worked. Krispy Kreme tried every flavor under the sun and still their stock price tumbled, stores closed, people were let go.
So, what differentiates trend (Crocs) from juggernaut (Nike)? In hindsight, it’s easy to come up with notions. But how does one tell at the onset? Unlike many extinct dot-coms, Crocs presumably had a secure business plan. My kids all own pairs and still wear them now. You’d think cheap, indestructible children’s shoes would be surging during this “soul” crushing recession. The enigmatic and fickle marketplace. Something to think about while walking your pet rock.