Tuesday, February 13, 2007
The WSJ’s „Heard on the Street” column discusses Crocs (CROX), saying that the co is quietly planning a surprising strategy aimed at avoiding fad status: a bold step into everything from women's fashion footwear to apparel. Yet many on Wall St. aren't convinced Crocs can continue at its torrid pace. As of last month, roughly 30% of its shares were held by short sellers. Even bullish investors concede that the stock will have difficulty this year matching last year's 105.7% gain. Crocs' plan marks the footwear maker's most significant departure yet from the funky, perforated clogs for which it is globally known. The new line will feature little of the co's proprietary Croslite material. Rather, Croslite is relegated to the foot beds of the 9 new fashion styles, which feature wedge heels, leather, suede and lamb's wool. The fashion models are expected to sell for $70-200, well above the $30 price of Crocs' standard clogs. Such a bold move is necessary to perpetuate Crocs' explosive growth. The co has embarked on several efforts likely to take it further from its roots. Among the other styles Crocs will debut this year are women's strap sandals, women's flats, tennis shoes and men's and children's apparel incorporating Croslite or material like it. Crocs' primary models, the Beach and the Cayman, now represent less than half of its sales, down from nearly 87% in ‘05. Crocs CEO Ronald Snyder concedes that Crocs' early shoes may prove to be a fad. "That might be the case, but we probably won't know that for a number of years," he says. "By that time, Crocs will be a very large co with a lot of different brands under the Crocs umbrella."