Crocs

Stop apologising for the product. Make ugliness the point, and sell the customisation.

Listen on Spotify Read the teardown

From the show notes

Crocs, despite widely agreed to be ugly, have had a major comeback- even appearing in high-fashion runway shows!

Published as

43- Are Crocs Cool Again?

§01 — What to listen for

Crocs nearly died in 2008, a year after it was the hottest footwear stock in America. Listen for the turnaround that began in 2017 under Andrew Rees: the company cut its range, closed stores, and stopped trying to make the clog look like a normal shoe. Then it leaned into the joke — Balenciaga put a platform Croc on a runway, Post Malone got a collaboration, and the brand started charging for Jibbitz charms that let the customer make the shoe their own.

The strategy is a hero product with a personalisation layer on top. One mould, produced at enormous scale, with margin coming from the accessories and the limited drops. The 2022 acquisition of HEYDUDE is where the episode gets sceptical: a company that had finally learned what it was bought something that was not.

The episode tells the story. The written case does what twelve minutes cannot: the business model, the moat, the statements, the valuation, and a verdict. Read the Crocs teardown.

§02 — The strategy, named

The mechanisms this episode demonstrates, in the same vocabulary the case library uses. Where a pattern has been written up, the claim is here; otherwise the tag is still in the queue.

hero product
Tagged across the library; the write-up is in the queue.
brand reinvention
Tagged across the library; the write-up is in the queue.
cultural velocity
Tagged across the library; the write-up is in the queue.
scale economics
Tagged across the library; the write-up is in the queue.

§03 — Go deeper

43Consumer

Crocs

Narrow moat · Watch it

The founders

Andrew Rees
“The thing everyone mocks about your product may be the only thing about it that cannot be copied. Rees stopped apologising for the clog and it became the strategy.”

Your turn

You have a record year, a single product, and a memory of 2008. Do you spend $2.5 billion on a second brand to make the company less dependent on the clog?

Andrew Rees · 2021

Verdict

Watch it

Two consecutive years of Crocs-brand growth in North America with HEYDUDE revenue flat or better would convince me the cycle argument is wrong and the multiple is simply too low. If instead the Crocs brand turns negative in North America while the share count keeps falling, the buybacks are shrinking a business rather than concentrating a franchise, and the verdict becomes a pass.

§04 — More from Objects of Desire

How an ordinary object becomes a craze, and what the company does when the craze ends.

Previous · 42

Owala

Enter a saturated market late with one genuinely better feature and a colour drop calendar.

Next · 44

Charlotte Tilbury

Put a working makeup artist's name on the box and price the credibility, not the pigment.