Crocs, the maker of the love ’em or hate ’em rubber shoes whose fans once included Rihanna and P Diddy, has fallen out of fashion.
The company, whose comfortable clogs were dreamt up by three friends on a sailing trip, yesterday revealed tumbling profits and plans to shut 100 shops with the loss of up to 200 jobs.
At its peak, Crocs had a host of celebrity fans, with actors Alicia Silverstone, Whoopi Goldberg, Jack Nicholson and rock star Steven Tyler among the stars spotted in a pair, while Sex and the City fashion maven Sarah Jessica Parker dressed her son in them.
But only two years after the maker of the colourful resin-moulded clogs reported sales of more than $1bn, fickle fashionistas have moved on.
Ironically, part of the company’s problem is that the waterproof shoes – which have been mocked as the world’s ugliest footwear – are so robust that owners did not need to replace them.
Six months ago, the private equity giant Blackstone invested $200m to help revive the firm and took a 13 per cent stake. But it has now decided on drastic action, by closing shops and cutting jobs.
The Colorado-based group’s president Andrew Rees said the brand needed “dynamic change” in its strategy, organisation and market approach.
About 100 of its 620 stores around the world will close. Crocs did not reveal the locations of the closures. Across Europe, Crocs has more than 115 company-owned and 98 franchised stores.
It has three shops in the UK but had once planned to open up to 30.
Crocs will also ditch plans to win over new customers with fashion leather boots and dressier footwear and will instead focus on its core products of sandals, loafers and other casual shoes. It will also cut the number of styles available by up to 40 per cent and boost advertising spending by 50 per cent. It said the closures would initially reduce sales by up to $50m.
It reported second-quarter profits had tumbled by almost half to $19.5m but sales edged up 3.6 per cent to $377m.
Wall Street reacted positively to the restructuring plan and Crocs shares jumped 11 per cent on the news.
The footwear firm was founded in 2002 and Crocs initially became popular with people who worked on their feet all day such as chefs and nurses for their comfortable and hard-wearing designs.
The group listed in 2006 at $21 a share and yesterday its shares rose to about $16.