Photo by David Cabrera
In 2008, Crocs had a big problem. The Colorado-based footwear brand was only six years old and experiencing a huge dip in sales. In 2003 the company did $1.2 million in sales, which catapulted to $850 million in 2007. But after years of exponential growth, sales dropped in 2008 by 15 percent to $722 million, and the company posted a $185 million loss.
A mix of things contributed to the downturn. Crocs had a team of executives with no experience in footwear or fashion—its then-CEO Ron Snyder was a former exec at Flextronics, an electronic contract manufacturing firm. And because of that, they didn’t have a handle on production and fulfillment. They would make too much product and have to deal with excess inventory. Or they wouldn’t fulfill store orders in a timely manner. The product assortment also got too big, going from 25 styles in 2006 to 250 in 2007. But one of its main issues was perception. While brand awareness around Crocs was high, young people found the foam clog ugly and unappealing. And amidst all of this, a recession was happening. Crocs was inching toward bankruptcy.