May Your Crocs Melt Off Your FeetMonday, August 17, 2009
Michael Masterson writes the obituary on this one-hit, boom-period blunder (scroll down the page). Thanks to Mark for the link.
A One-Hit Wonder Falls Off the Charts
Crocs. Your grandma might have a pair. Maybe the nurse at your doctor’s office too. Seems these brightly colored shoes/sandals are on everyone’s feet. In fact, the company sold 100 million pairs in seven years. And they had to keep ramping up production to meet demand. They spent big time on manufacturing plants and distribution centers.
Then came the recession.
The company posted a $185.1 million loss last year. It had to cut nearly 2,000 jobs. Its stock price plummeted 76 percent. All this just two years after posting a $168.2 million profit. And just three years after selling $200 million in shares to the public.
The moral of the story? Be skeptical of one-hit wonder companies. If their plan for the future is to keep riding the same fad, they are doomed for a quick decline.