In the Western Rockies of Boulder, Colorado, in 2002 three longtime friends and created a lightweight antimicrobial foam they called Croslite using a technology created by a Canadian laboratory in 1999.
By 2005, revenues were $108.6 million, by 2006, revenues jumped to $354.7 million. In 2008, the wave came crashing down, the company lost $185.1 million. Crocs had to cut 2,000 jobs and its stock price has decreased 76 percent. Today Crocs has millions of dollars of debt and a huge surplus of shoes.
What caused the collapse of crocs?
Crocs didn’t just flood the market with a wide variety of its classic Crocs in a lot of colors, it quickly added many other styles.
The problem was that many of the expanded styles were meant to be attractive. The idea of Crocs is not to look beautiful but to be functional. If people want fashion, there are many other brands to look at.
The expanded line turned Crocs into just another brand. At first, Crocs had an enormous advantage because it owned an idea and an image in the mind. The multitude of styles undermined that image and destroyed the power of the brand.