Crocs fans are a loyal bunch. After all, it takes guts and a certain ability to buck social norms to wear foam clogs out in public. So many Croc lovers were anxious when they heard the news that the billion-dollar global megabrand was shutting the last of its company-owned manufacturing plants, located in Italy. It had previously shuttered its Mexico facility. On Twitter, Crocs customers assumed that this meant the company itself was on its last legs–and they seemed to move through the various stages of grief, from shock to anger to acceptance.
https://twitter.com/BallorEmeleigh/status/1027720368600047622
crocs factories are shutting down and so am I
— kat (@kkheinrichs) August 9, 2018
In a statement, Crocs tried to allay everybody’s fears by reporting that this was just a run-of-the-mill supply-chain situation. “As we streamline our business to meet growing demand for Crocs, we’re simply shifting production to third parties to increase our manufacturing capacity,” a spokesperson shared with Fast Company. “We’re extremely grateful, but not surprised that our passionate fans are rallying around the brand today.”
Crocs has seen declining revenues over the past few years. After stellar growth in the early 2000s, it hit some troubled waters starting in 2011, with sales beginning to decline. Last year, with sales in a tailspin, the brand announced it would be closing 160 stores, and CEO Gregg Ribatt stepped down, handing over the reins to Crocs president Andrew Rees.
This year, things seem to be improving marginally. Revenues for this last quarter hit $328 million, which beat expectations. But the company is not on sure footing by any means. And it’s unclear what, exactly, the brand is trying to do by shifting all of its manufacturing operations to third-party factories. Companies that own their own factories are often better able to monitor quality and alter supply to match demand, cutting down on wasted inventory.
We’ll have to wait to see how this switch in factories impacts Crocs’ bottom line.
Recognize your brand’s excellence by applying to this year’s Brands That Matter Awards before the early-rate deadline, May 3.
