Crocs on the Rocks
What sales (or lack thereof) of the rubber shoes reveal about of the economic crisis.
In February 2006, Crocs, Inc. raised $208 million in its IPO; it was the most successful stock market debut for a footwear company in the history of feet. In 2007, Crocs sold 30 million pairs of shoes worldwide. In October of that year, its stock price hit $75 per share, giving the company a market cap of $6 billion. In 2008, revenues declined $126 million from the previous year, with a 44 percent drop in the fourth quarter alone. A couple of weeks ago, Crocs’ auditors expressed “substantial doubt about the company’s ability to continue as a going concern.” This week, the company is scrambling to find a way to pay off a $22.4 million debt on its revolving credit line. Its stock is trading at just a little over a dollar per share.
An equally valid question — how did America develop a passion for antifungal clown clogs so quickly? — is easier to answer. Every once in a while, we go nuts for colorful, plasticky, collectibly disposable things. Remember Hula Hoops? Swatches? Cabbage Patch Kids? This time around, it was Crocs’ turn.
Crocs was founded in 2002 by three Colorado businessmen. One of them, Scott Seamans, had discovered a clog on a trip to Canada. It was black, it had holes in it, and it was made from a proprietary foam resin that would eventually be dubbed Croslite. The clog was intended for use in day spas, but Seamans — who lived up to his surname and was an avid boater — thought it had nautical potential, too. It was grippy, it was lightweight, the holes allowed for drainage, and the resin it was made from remained odor-free even after heavy usage. Seamans added a strap to the clog’s heel to give it more support, and showed it two friends of his, Lyndon Hanson and George Boedecker.
They agreed the shoe had great commercial promise, came up with the name Crocs in honor of its amphibious prowess, contracted with the Canadian manufacturer of the clog that had originally caught Seamans’ eye to produce a product for them, too, and began marketing it at Florida boat shows. In November 2002 in Fort Lauderdale, they sold 200 pairs. A few months later in Miami, they sold 1,000.
Along with the heel strap, Crocs boasted at least one other crucial design feature that distinguished them from their Canadian forebear: They came in belligerantly bright colors that forced you to notice them. And when you noticed them, you realized how transcendently goofy they were. They looked like clogs that had mated with bath mats. Garish, synthetic, with a streamlined yet clunky medical feel to them, Crocs could have easily been mistaken for corrective shoes for Teletubbies suffering from severe metatarsal deformities.
“Just try them,” their creators told a skeptical public. Sure, they weren’t exactly sleek, but they were practical. And even more important than that, they were comfortable. Body heat made Croslite pliant — Crocs conformed to the exact shape of one’s foot to provide a customized, shock-absorbing fit. Walking on Crocs was like walking on marshmallows crafted by angels with degrees in osteopathy. Wear them for an hour and you no longer cared that even Ronald McDonald wouldn’t be caught dead in your shoes.
If Scott Seamans and his co-founders had been Frenchmen, or Italians, or citizens of any other country where style is a major priority, you might not be reading this story right now. But they weren’t. They were Americans, and in 2002, America was, more than anything, a country desperately in need of comfort. Battered by 9/11, frazzled by anthrax scares and Code Orange alerts, America wanted a shoe that provided more than just arch support. America wanted a shoe that nurtured it, cradled it, made it feel warm and safe and loved. While Crocs may have started out as a better boating shoe, they quickly became the bacteriostatic security blanket for our souls.
They had other virtues, of course. For pregnant moms, diabetics, and anyone else whose feet tended to swell, they offered sweet, roomy, non-binding relief. Kids and lazy people loved them, too — socks weren’t necessary and there were no laces to tie. And certainly they were great for alcoholics — they were slip-proof, easy to hose off when vomited on, hard to lose track of. Finally, in an age where getting noticed afforded much greater cultural cachet than looking good, they got noticed. Indeed, their clugliness may not have been stylish, but they certainly projected attitude. “Yes, I know my shoes are wounding the eyes of everyone who chances to gaze upon them,” Crocs-wearers implicitly shouted with every taste-infringing step they took in public. “But my comfort overrides your comfort every time.” In essence, Crocs were boom-boxes for soccer moms.
The period from 2002 to 2007 was a magical time for Crocs. The company bought subsidiaries, conquered overseas markets, struck licensing deals with Disney and the NBA, charmed Wall Street, expanded its product line, turned its founders into millionaires, open hundreds of its own retail stores and kiosks, and most of all, sold shoes, more than 50 million pairs worldwide.
Then came 2008, declining sales, factory closings, a net loss of $185 million. Today, the company that was once dubbed “the footwear Google of the new millennium” is looking more like the footwear Ask Jeeves of the new millenium.
Sure, scores of copycat clogs (and some forebears) all compete with Crocs for the same feet now. But does anyone really believe the market for comfortable shoes has contracted in these grim times of economic uncertainty? Even if Crocs had a thousand able competitors, its sales should still be rising. If you’ve been laid off, if you’ve lost your house to foreclosure, you want the warm, conforming embrace of comfortable shoes more than ever. If only $30 stands between you and homelessness, what do you spend that $30 on? Some groceries that will be gone in a couple of days, or candy-colored Prozac for your feet? The fact that Crocs is on the verge of extinction is bad news for Crocs, but even worse news for America. It means we’ve fallen so deeply into the depths of despair that even the soothing promise of superior grip soles and footbed circulation nubs holds little solace for us now. • 7 April 2009
Greg Beato writes regularly about pop culture for Las Vegas Weekly and Reason magazine, where he is a contributing editor.
Photograph by Ferdi's World via Flickr (Creative Commons).