Rise of the Clog: The Unexpected Success of Crocs

Crocs are more than just shoes – they're a polarizing phenomenon. Loved by some, hated by others, wearable indoors and outdoors, at the beach or on the runway. This unconventional product has been on quite a journey: from a practical boat clog, to an ugly but comfortable shoe, and ultimately to a symbol of self-expression in the fashion world. This is the story of Crocs, its unique brand strategy, and the explosive growth that defied all expectations.

• Instant success: Crocs launched in late 2002, and by the close of its fifth fiscal year in 2006, it had sold nearly 30 million pairs of clogs. That same year, Crocs made history with the largest IPO in footwear at the time.

• Ugly can be beautiful: Crocs has always embraced its polarizing design, leveraging its "love it or hate it" appeal as it meant that consumers were paying attention.

• Jibbitz charms: Each pair of original Crocs features 26 holes, offering endless opportunities for personalization with small charms. This idea – and the eventual business – didn't originate at Crocs but with a Boulder, CO, stay-at-home mom.

• Christopher Kane: Crocs was seen as a fad by many until its comeback in 2016 when they appeared on the London Fashion Week runway in a high-profile collaboration with designer Christopher Kane.

• HEYDUDE acquisition: In 2021, Crocs acquired the shoe brand HEYDUDE for $2.5 billion – an acquisition that so far hasn't quite lived up to its expectations.

This story starts on the sailing boat “Hannibal” in the Caribbean in the summer of 2002. Three childhood friends in their 40s were enjoying some time off when an idea sparked that would change the course of their lives forever.

The three friends each had successful careers in different fields. The owner of the Hannibal, Scott Seamans, was retired since a few years back having had a successful career as an inventor and product developer. George Boedecker Jr., an ambitious entrepreneur, had made a name for himself as a highly successful Domino's Pizza franchisee, owning over 100 locations. Finally, there was Lyndon “Duke” Hanson, a former computer salesman who had recently lost his job and was sleeping on a friend's couch.

Early on their trip at sea, Seamans mentioned something he wanted his friends' opinions on. He went below deck and returned with some sort of foam clog. Or what was it? Some sort of strange mix between a clog, slipper, and flipflop? But at the same time nothing like that at all. Their surface featured 13 small holes scattered across it, adding to their quirky appearance.

Seamans explained that he had come across this odd product during a recent trip to Quebec. The foam clog, developed by a Canadian company called Foam Creations (the North American division of Finproject), was made from a proprietary closed-cell resin named Croslite. It was originally developed for water activities, much like a swimming shoe.

However, it was lighter and more flexible than traditional rubber boat shoes, and it molded to the shape of the foot which reduced the risk of slipping on wet surfaces. Additionally, the ventilation provided by the holes, combined with the polymer's resistance to odor absorption, made it highly practical. It had been available on the Canadian market for roughly a year but with limited success.

But Seamans, with his product development background, saw untapped potential in the foam clog. Convinced that it could do better with a small tweak – a rubber strap to support the heel, threaded through holes he had added on the sides – and on the U.S. market. He reached out to his friends for their opinions. In fact, he was more direct than that, asking if they were interested in investing in what he saw as the “perfect boat shoe.”

The duo initially laughed at how ugly they were, far from convinced of their viability. But after wearing them for a few days, the design began to grow on them. And by the time they reached Fort Lauderdale all three were equally convinced of their potential.

The trio chose Florida as headquarters for their new company. This allowed them to combine work with their sailing trips – a decision that perfectly reflected their relaxed approach to their new business venture.

To get started, they acquired the exclusive rights to distribute Foam Creations’ clog on the U.S. market. Despite lacking experience in selling shoes or launching a business-to-market venture, the three had a broad range of expertise. In their small company, though they initially placed little formal emphasis on roles, Boedecker naturally stepped into the position of CEO, Seamans became the CTO, and Hanson assumed the role of COO.

Now, just a few months after returning to Florida from their trip at sea, their clogs were ready to make their U.S. debut. They unveiled the product, dubbed the “Beach,” at the Fort Lauderdale International Boat Show in November 2002. The strange-looking clogs were an unexpected hit, and they sold out their entire stock of 1,000 samples at $30 per pair.

Maybe the product was ugly and unconventional? But maybe being different was exactly what made it appealing? And maybe the market that the trio had anticipated as their target just might be a bit bigger than simply boaters at the beach?

The reception at an early 2003 U.S. shoe market exhibition suggested the potential for a much broader audience. Everyone seemed to like them.

The clogs didn't just attract attention for their utility; their comfort and affordability made them appealing to a wide range of consumers. Restaurant workers, hospital staff, and gardeners quickly discovered the clogs were ideal for their needs. Their vibrant colors also made them a hit with younger audiences when they eventually released children's sizes.

Within months, the company secured retail accounts with several major retailers. By the end of 2003, they had distribution agreements with roughly 300 retailers, including Nordstrom, and DICK'S Sporting Goods. That full first year, they sold 76,000 pairs of clogs.

Beyond their distinctive appearance, the production process of the clogs set them apart. Unlike traditional footwear, which required retailers to place orders months in advance, the Beach clog could be manufactured and delivered to retailers within weeks. Therefore, as demand now increased like a hockey stick, supply was able to keep up.

It was obvious that this bizarre, non-slippery clog – born out of utility – had quickly become much more than simply a “perfect boat shoe”.

Up until this point, the company had operated under the name Western Brands, but a change was needed as its unbranded product was evolving into a promising business. The clog – more and more described as a shoe due to its expanding uses – deserved a name that matched its playful aesthetics.

Eventually, they settled on Crocs, short for crocodile – an animal comfortable both on land and in water, fitting the attributes of the shoe. The logo featured a friendly-looking crocodile, named “Duke” after the co-founder. Their initial marketing tagline, “Get a Grip,” cleverly highlighted the shoe's non-slip qualities.

The rebranding built on their momentum, with Crocs sales reaching 649,000 pairs in 2004. This achievement was particularly remarkable given that their success up to this point had relied entirely on word-of-mouth marketing. Along with the rebrand, the company moved its headquarters from sunny Florida to the founders' hometown of Boulder, further signaling their growing commitment to the business.

Crocs' early logo with the tagline “Get a Grip”.

Crocs' early logo with the tagline “Get a Grip”.

At this time, a man named Ron Snyder was becoming increasingly involved in the fast-growing company. Remember that Duke Hanson was sleeping on a friend's couch? The couch in question belonged to Snyder.

But Snyder was not just a friend with a couch – he was a seasoned businessman whose expertise would significantly shape Crocs' future. He had previously served as vice president and head of global divisions at Flextronics (now Flex), but in recent years, he had been acting as a consultant for his friend's promising shoe company.

In 2004, he took on the role of president and played a key part in acquiring Finproject NA, the creator of the original foam shoe that had inspired their company. This acquisition meant that Crocs now owned both the manufacturer of their shoes and the formula for the Croslite resin, rather than simply ordering and distributing Finproject's products. As Hanson put it, the deal was akin to "the tail buying the dog."

In early 2005, Boedecker stepped down as CEO, and Snyder stepped in to fill his shoes – or clogs, if you will. Slipping into his colorful Crocs, Snyder was ready to take the company into its next expansion phase. Described by the executives as a “eureka moment” Crocs now had the entire value chain incorporated:

In his first couple of years (first as a consultant, then as president, and finally as CEO), Snyder oversaw the addition of manufacturing facilities in China, Italy, Mexico, and Romania. By rapidly scaling up production and adding a global infrastructure, he positioned the company to seize its expansion opportunities.

Just as Crocs itself – a colorful foam clog with a bizarre design – had been an unlikely business venture, the idea of turning the brand into a global phenomenon in just a few years was equally ambitious. But Snyder pushed the company beyond its original vision, betting big on the potential he saw:

To his credit, his bet would turn true. Crocs closed his first year as CEO with over 6 million pairs sold – almost a tenfold increase in that one year.

As Crocs expanded considerably, so did its product range. The original Beach clog was soon accompanied by other clog variations, as well as rain boots and flip-flops – all, of course, available in a vibrant array of colors. The company also added the line Crocs Gear, which included t-shirts, sunglasses, and socks. Additionally, the product line Foam Creations sold boat cushions and hot-tub pillows. In just one year, from 2006 to 2007, Crocs' product offerings increased from 25 to 250.

The three founders, Scott Seamans, George Boedecker Jr., and Lyndon “Duke” Hanson.

The three founders, Scott Seamans, George Boedecker Jr., and Lyndon “Duke” Hanson.

Beyond their functionality and comfort, Crocs' eye-catching aesthetics became a marketing tool in itself. As a global conversation starter – either loved or hated – the shoe's divisive nature boosted brand recognition. Their distinctiveness made them impossible to ignore which fueled the expansion of the strange clog.

By the mid-2000s, Crocs had found their way onto the feet of celebrities. Not through today's standard influencer marketing campaigns, but through pure word-of-mouth. The product's growing reputation alone attracted high-profile early adopters such as Al Pacino, Jack Nicholson, and Ben Affleck.

Another early fan of Crocs was the legendary Swedish hockey player, Peter Forsberg. He took his fascination with the shoe to an entirely new level. Much like Seamans and Snyder had envisioned Crocs' potential, Forsberg – acting like an experienced businessman – decided to bet on the product and secured distribution rights for the Nordic market. In less than two years, his company sold over 500,000 pairs of Crocs, or as they still are called here in Sweden, Foppatofflor ("Foppa" being his nickname and "tofflor" meaning slippers).

Although Crocs had achieved massive success without traditional advertising, their next growth phase included a marketing push. In 2005, the brand launched its first consumer ad campaign, "Ugly Can Be Beautiful," created by Boulder-based TDA Advertising & Design. The campaign fully embraced the shoe's unconventional charm:

As we hope we've made abundantly clear, at this point Crocs were all about utility and comfort. Sure, they didn't make it to the runway (yet) but they were undeniably practical. For many, you could probably say that they were an anti-fashion statement. Over time, while their comfort and functionality remained unchanged, somehow Crocs became fashionable.

This was also the time when most of you probably first encountered Crocs, where the clogs spread like a pandemic – at least if you ask its haters – across the world. At the time, many assumed these "clown shoes" were just a passing fad.

During this pivotal year, the polarizing clogs received an unexpected boost from a stay-at-home mom's startup – one that made Crocs even more colorful and playful. Or, depending on who you asked, even uglier.

Chances are high that you're familiar with Jibbitz – you know, the small charms that you can snap into your Crocs? Yeah, those. But what most people probably aren't aware of is that a Crocs clog, decorated with these tiny accessories, doesn't just hold one incredible, unlikely, and meteoric business success story, but two.

Just as Crocs was taking its shoes to the global market, a homegrown experiment was unfolding near the company's headquarters. Stay-at-home mom Sheri Schmelzer had three children, aged 3 to 7, who all had embraced the fast-growing shoe trend sweeping the country. The family collectively owned 12 pairs of Crocs, with both Sheri and her husband, Rich, equally enthusiastic as their kids.

As mentioned earlier, Crocs were designed with ventilation holes. Not all clogs had these 13 holes but more than 80% came speckled with them.

In the summer of 2005, Sheri found herself decorating the holes in her family's Crocs' with whatever she could find around the house. What started with rhinestones, clay, and silk flowers soon evolved into molded plastic and rubber materials. After focus group testing on their close friends and at the children's school, they sensed that they could actually be onto something.

After patenting the product, Rich and Sheri launched a website in August 2005, officially naming both the company and the product Jibbitz. Originally priced at around $3 per charm, these small accessories introduced an entirely new market segment in footwear customization.

If Crocs is to be considered an instant success, Jibbitz was the same – but on steroids. The family's basement assembly line could only fulfill orders until November, at which point demand had grown so rapidly that they had to outsource manufacturing to Asia just to keep up.

One year later, in October 2006 – with a 12,000-square-foot office and warehouse in Boulder, 42 employees, and over $2 million in monthly sales – Jibbitz was acquired by Crocs. The price tag landed at $10 million, which by the agreement was doubled once sales targets were met.

For Crocs, the move was obvious – Jibbitz was the perfect acquisition, almost as if it had been built within Crocs' walls. Integrating Jibbitz into Crocs' distribution and sales network allowed the company to push its already rapid growth even further. Additionally, backed by Crocs' resources, Jibbitz gained the financial support to significantly expand its product line.

With Jibbitz onboard Crocs became even more popular with children. On their already colorful clogs, they could now attach charms of everything from Barbie dolls and Pokémon characters to Coca-Cola bottles and Marvel superheroes. And from a financial perspective, the economics were undeniable: 13 holes per shoe, 26 in total, with prices generally starting at $3 (now $5) – the math spoke for itself.

Another key aspect of Jibbitz was/is its extraordinarily high margins. Crocs CEO Andrew Rees addressed this during the company's Q4 2021 earnings call, sourced through Quartr Pro:

One way to keep consumers engaged with Jibbitz is by continuously introducing new, limited-edition charms – often tied to matching clogs in collaborations with influencer brands or celebrities. This strategy fuels demand, as consumers rush to get their hands on new designs before they sell out or are discontinued. As of this writing, there are over 700 different charms available to decorate your Crocs.

Just like your favorite charm on your neon green clog, Jibbitz has remained a central part of Crocs for nearly two decades. The $20 million price tag has been recouped long ago. In 2024, Jibbitz generated over $260 million in annual revenue, accounting for more than 6% of the company's total revenue. With “incredibly” high margins on these financials and steady growth alongside the Crocs brand, it's safe to say it was a value-adding acquisition.

If Crocs once had been all about utility and comfort, Jibbitz helped to slowly shift the perception. Sure, they were still rather ugly with charms on top – if not even uglier – but they evolved into a platform for self-expression. Endlessly customizable and a long-term cash cow for the company.

A clog speckled with Jibbitz – its 12 add-ons cost more than the shoe itself.

A clog speckled with Jibbitz – its 12 add-ons cost more than the shoe itself.

Just a few months before acquiring Jibbitz, Crocs completed its IPO on the Nasdaq stock exchange. In February 2006, the company went public marking the largest IPO in footwear history.

For the IPO, the company had just released its 2005 financials, revealing that the 6 million pairs sold had generated a revenue of close to $110 million. Less than four years after that sailing trip in the Caribbean, it's fair to say Crocs had become a remarkable business success story.

The company carried its momentum into 2006, closing the year with approximately $350 million in revenue and 21.6 million shoes sold. The upward trajectory continued into most of 2007, with annual revenue soaring to roughly $850 million as 46.9 million pairs were sold.

But by November 2007, cracks in Crocs' hockey-stick growth trajectory began to show. As the company announced its Q3 earnings, concerns over rising inventory levels reached an alarming level. Management's reassurances that the buildup was intentional to prepare for the 2008 spring and summer season did little to ease investors' fears. The result? Crocs' stock price was cut in half within two weeks.

Up until this point, Crocs had ridden a wave of strong sales momentum. As discussed earlier, Snyder had capitalized on this period of strength, betting aggressively on expansion. Until now the company had been producing shoes not based on retailer demand but on its own projections for market demand. This had worked seamlessly until now. But signs were emerging that the market had reached a saturation point.

Adding to the pressure, legal challenges started mounting. As the first and dominant player in a completely new market segment, Crocs' rapid growth inevitably attracted copycats. A flood of knock-offs – or "croc-offs," as they were fittingly called – spread across all Crocs' markets.

To combat these, Crocs launched multiple legal disputes to protect its intellectual property across various jurisdictions. Over time, these legal battles yielded mixed results, but they primarily highlighted the growing challenges Crocs faced and the shifting momentum in its business.

And as is often the case – when it rains, it pours.

By 2008, the financial crisis had begun to take hold, leading to weaker consumer spending, which naturally hurt Crocs' sales. The worsening inventory situation, and deteriorating financials, followed by substantial layoffs all contributed to bringing the stock down over 95% at the end of 2008 from its peak – just a year after it had seemed the company could do no wrong.

Maybe Crocs was just a fad after all?

As quickly as Crocs arrived on the global stage, the same can be said about how quickly it disappeared from consumers' minds. For everything that went right from the company's inception, just as much went wrong when the tide turned at the end of the decade. At its lowest point during this period, Crocs' market cap fell below $100 million.

Despite reporting losses in 2009 and facing serious doubts about whether it could stay afloat, the company managed to navigate the stormy waters of the recession.

During these stressful times, Ron Snyder stepped down as part of larger management changes. For a brief period, the company turned to John Duerden, a seasoned leader and turnaround specialist. Although Crocs returned to profitability in 2010, it continued to struggle with stagnant sales and volatile earnings throughout the early 2010s.

Through these years the company's main clog category was still facing inventory issues. Another major challenge at the company was its wide product focus. Initially introduced under Snyder's leadership and later expanded by CEO John McCarvel (2010–2014), Crocs' overwhelming success with clogs led the company to believe it could diversify and succeed in any category.

As 2013 turned into 2014, private equity firm Blackstone announced a 13% stake in Crocs – a move that would have significant implications for the company in both the short and long term. Most notably, it led to a management overhaul, bringing in executives with deep industry expertise.

Industry veteran Gregg Ribatt was appointed as CEO, taking the reins to steer the company in a new direction. This transition also marked the arrival of Andrew Rees, who joined as President and would later succeed Ribatt as CEO.

Looking back, the initiatives set in motion by Blackstone, Ribatt, and Rees transformed Crocs from an erratic, overextended shoe company into a focused foam clog brand. One of Ribatt's early campaigns captured this shift: "Classics never go out of style." Many of the product lines introduced during Crocs' overexpansion were shut down as Ribatt halved the company's product segments.

Additionally, Ribatt shifted the company's focus toward digital sales channels, leading to the closure of many brick-and-mortar stores opened in the previous years. Importantly, the company also hired a chief marketing officer and began working with an ad agency – investments that would prove fruitful in the coming years.

Lacking industry-experienced leadership may have proven costly for Crocs during the 2008 financial crisis. However, without the visionary boldness of the founders and Snyder, its early success would probably never have happened.

After all, a major footwear company would have never launched Crocs – it took a certain naivety to introduce a shoe that was widely mocked as ugly. But as the company grew and transitioned to its next phase, operational and strategic leadership became essential.

While these changes were slowly setting the company in a new direction, consumer interest was steadily fading. The once-relevant shoe was in a few years relegated from storefront displays to clearance bins in the back.

In Crocs' absence, another shoe brand stepped into the spotlight. The Birkenstock sandal, produced by a German company with over 200 years of shoemaking heritage, was making a stylish comeback.

At the same time, Tevas (owned by Deckers Outdoor) experienced a similar resurgence. Once a staple for dads on hiking trails and camping trips, these functional sandals suddenly found themselves at the forefront of fashion. Both previously viewed as "ugly" became the new definition of trendy and cool. This trend would in some years also revive the Uggs brand (also owned by Deckers Outdoor).

Just like consumer interest, celebrity endorsements had dwindled in the early 2010s. But in 2015, a young boy unexpectedly brought the brand back into the spotlight. Prince George of Great Britain, son of Prince William and Kate Middleton, was photographed wearing navy blue Crocs at a charity event.

While it wasn't a major moment, the royal association gave Crocs a small boost, driving sales in the U.K. and helping empty out some of those clearance bins. If this was just a spark, then what followed was a wildfire – spreading slowly but unstoppably across the world.

In 2016, the most unexpected endorsement would elevate the brand to new heights. Not only in terms of reach but also status. The stage was the runway at London Fashion Week at Tate Britain, and the Scottish designer Christopher Kane was the man behind the transformation – turning Crocs from anti-fashion into the complete opposite.

For his 2017 spring/summer collection, Kane sent models down the runway wearing earth-toned Crocs, each adorned with charms of minerals and geodes. The polarising clog of the past decade was back, as described by Vogue: “in a miraculous turn of events, suddenly, weirdly, absolutely, ridiculously chic.”

As you can imagine, the collaboration was initially met with shock and skepticism. Still, just as was the case when they arrived at the scene a decade earlier, they once again became the topic of conversation. However, this time not in middle school hallways and suburban barbecues – but in high fashion's inner circles.

Kane not only revived the Crocs brand but also showed the clog's potential for collaborations: two blank canvases ready to be designed in any color, with 26 holes for Jibbitz charms to add even more personal expression. Unintentionally, he had created a blueprint for the company's marketing strategy for years to come.

Maybe Crocs would have made a comeback without Kane's runway show – no one can say for sure. But what happened that day became the catalyst for a global resurgence, one that continues to shape the brand today.

Crocs clogs from the company's first collaboration with Christopher Kane in 2016.

Crocs clogs from the company's first collaboration with Christopher Kane in 2016.

After its debut on the runway in 2016, two more collaborations with Kane followed in the years that ensued. Then came Balenciaga (owned by Kering), which released a colorful 4-inch platform Crocs at Paris Fashion Week in 2017. Several runway shows and collaborations later, Balenciaga continues to feature Crocs-inspired footwear in its collections.

Once the high-end fashion world had embraced Crocs, the iconic clog started reappearing on the feet of celebrities. Around this time, the brand started partnering with some of its most dedicated celebrity fans, allowing them to co-create their own custom designs.

Crocs' first major celebrity collaboration was with Post Malone, who designed a striking yellow clog featuring black insoles and outsoles, and a barbed-wire motif across the surface. Alongside the signature clogs, he also created six exclusive Jibbitz charms. The collection was an instant hit, selling out immediately.

Since then, Crocs has collaborated with artists like Bad Bunny and Justin Bieber, as well as major brands such as McDonald's and KFC (owned by Yum! Brands), featuring fried chicken drumstick charms. These limited-edition releases always generate significant buzz and consistently sell out in no time.

Its partnerships with influencers and corporations have been a masterstroke for the brand. In an era shaped by Gen Z, where influencer culture and social media dominance are of vast importance, limited-edition releases have proven incredibly effective in capturing attention and driving demand.

Despite Crocs' resurgence, one thing remained unchanged – it was still, if not exactly the same, then at least a similarly polarizing shoe as before. The key difference this time was its broader appeal. Crocs had become more universal and democratic. Whether fashion-forward or purely functional, worn indoors or outdoors, as a form of self-expression or simply for comfort – Crocs were now for everyone.

Today, the brand defines its core consumer groups as The Explorer, trend-aware, often younger; and The Feel Good, comfort or utility-seekers, often a bit older. In the early 2000s, Crocs primarily attracted Feel Goods with its focus on practicality. However, its resurgence was largely driven by Explorers, who embraced Crocs as a fashionable statement and a form of self-expression.

This evolution is reflected in its partnerships. From playful collaborations with Lightning McQueen and Pop-Tarts to high-fashion alliances with Balenciaga, Crocs has aimed to engage everyone. Well, not everyone may see themselves as a potential customer – but it's difficult to find someone who's not aware of the brand. Ultimately, awareness is the first step toward changing perceptions, turning even former skeptics into potential buyers.

The more important side of this is of course the lovers. Many of Crocs' customers are longtime fans, loyal to the brand for years. This customer group tends to stick with Crocs, closely follow its collaboration drops, and keep coming back for fresh clogs or Jibbitz charms. With the brand now over two decades old, many of its younger fans have grown up with Crocs. Perhaps it was even their very first pair of shoes. This deep-rooted familiarity plays a powerful role in brand loyalty and long-term customer retention.

Crocs' reputation for comfort became even more significant when the COVID-19 pandemic hit, propelling the brand's momentum further. As people were confined to their homes, casual wear became the dominant trend worldwide. Consumers sought clothing that was comfortable and far removed from the office dress codes they were used to. An exact description of what Crocs had always represented.

At the same time, in a move that was both compassionate and strategically brilliant, the company launched the "Free Pair for Healthcare" campaign, offering a complimentary pair of Crocs to every healthcare worker in the U.S. Healthcare workers had been among its most loyal consumers for years – drawn to the clogs' comfort, slip resistance, easy-to-clean material, and breathability.

The initiative not only earned goodwill from the recipients but also gained widespread praise, reinforcing the brand's image.

The numbers during Crocs' turnaround speak for themselves. Its appearance at Christopher Kane's runway show, its string of successful collaborations, and its strategic positioning during the COVID-19 pandemic, have all contributed to lifting the company's sales beyond its previous highs. The new management team brought in by Blackstone a decade earlier deserves much of the credit for this resurgence.

At its previous peak, revenue and EBIT landed at $847 million and $238 million, respectively. With 2024 now closed, these metrics have grown to $4.1 billion and $1.02 billion respectively.

Of this, approximately 80% of revenue is attributed to the Crocs brand. Within that segment, the company's core product remains the classic clog – still closely resembling the original from 2002 – along with various iterations of it, which together account for roughly 75% of the Crocs brand. The classic clog starts at $50, while many of its collaborative editions and its other foam-based variations are priced slightly higher.

Beyond clogs, the Crocs brand includes sandals, sneakers, and boots, which are made from materials with similar properties. Also within this category is its high-margin charms business, Jibbitz. The remaining 20% of the company's revenue comes from its other brand, HEYDUDE, which we'll explore in more detail soon.

Crocs products are sold in more than 80 countries, either directly through its roughly 350 retail stores and e-commerce platform or indirectly via third-party marketplaces – evenly split between the two channels. Of the group's $4.1 billion revenue in 2024, more than half comes from North America.

While the company continues to grow its North American revenue, its fastest-growing segment is its international markets. In the company's Q4 2024 earnings call, CEO Andrew Rees, emphasized that its Asian markets present the most significant growth opportunities in the coming years.

We've already touched on Jibbitz's high margins, but Crocs as a whole achieved an EBIT margin of 24.9% – something the company has maintained during its brand renaissance over the last four years, making it one of the most profitable in the footwear industry. This is likely due to A) its distinctive and valuable brand and intellectual property, which we'll get into shortly, and B) its efficient manufacturing process, which we'll dive into now.

A visualization of Crocs' revenue and EBIT growth since its inception in 2002.

A visualization of Crocs' revenue and EBIT growth since its inception in 2002.

By the time Ron Snyder became CEO of Crocs in 2005 the company started shifting its production to more cost and time-efficient alternatives. A decade later, during the Ribatt and Rees-led overhaul, Crocs completed this transition by closing its remaining in-house factories. As of 2025, all of its production is outsourced to third-party manufacturers in Vietnam, China, and Indonesia.

When the three friends, Seamans, Boedecker, and Hanson, first tried on the clog in 2002, its defining feature was the unique utility of its foam material. While Crocs has since evolved in many ways, this remains a core differentiator. That's why both the manufacturing process and the material itself are crucial to the company.

The foundation of Crocs' footwear is still Croslite, the proprietary material developed by Foam Creations in 2001. For the original clog, the mixed material is melted and injected into molds to form the shoe's signature shape. After cooling and solidifying, the strap is attached, and following a final quality control check, the shoe is complete.

As you hear, this process is highly efficient and thanks to this simple design the production remains far more scalable compared to most shoes.

So, we've talked a lot about Croslite and its unique properties so far. What really is the secret ingredient to this formula that has driven Crocs' success?

The Croslite formula remains a cornerstone of Crocs' business. As of 2024, the vast majority of footwear within the Crocs brand is made with this trademarked closed-cell resin. Croslite, along with the less-used LiteRide, is produced using a proprietary process that combines components in exact proportions to achieve its unique characteristics.

To ensure the exclusivity of its intellectual property, the company employs a combination of patents and trade secrets. The specific details of the trade secrets are known only to employees and trusted third-party processors under strict non-disclosure agreements. Crocs actively combats infringements by working closely with law enforcement to identify and remove counterfeit products from circulation.

While no competitor has access to its proprietary formula, Crocs is beyond the stage where a competitor launches the same product at a lower price and takes over the market. The product used to be all about its attributes but has turned into something much bigger. Its brand is now just as, if not more, important.

Although the exact composition of Croslite remains a trade secret, it is made from a non-biodegradable polymer, likely derived from fossil fuels. In response to environmental concerns regarding its manufacturing process, Crocs has committed to achieving net-zero emissions by 2040. A key part of this initiative is the development of a bio-based version of Croslite, replacing fossil fuel-derived components with renewable and recycled materials.

This shift is projected to cut the carbon footprint of each pair by up to 50%, all while preserving the comfort, durability, and functionality that Crocs are known for.

During Crocs' recent turnaround and success during the pandemic, the company was selling clogs like never before. As it closed out 2021, it had hit a record 103 million pairs sold. Thanks to its strong financial position and robust free cash flow, Crocs was able to ramp up its long-running share repurchasing program significantly – executing one of its most aggressive buybacks yet, repurchasing nearly 12% of its outstanding shares in that one year.

Just months after hammering home its commitment to these buybacks over dividends or M&A, Crocs surprised the market with a major acquisition.

In December 2021, it announced the acquisition of shoe brand HEYDUDE for $2.5 billion, a deal that at the time was about equivalent to a third of Crocs' market cap. While Crocs had previously made several considerably smaller acquisitions, including Jibbitz, Finproject, and a few manufacturers, this was its first major purchase, bringing a second brand into its portfolio alongside Crocs.

Just like the Crocs clog, HEYDUDE shoes stand out with their unique style.

Just like the Crocs clog, HEYDUDE shoes stand out with their unique style.

Crocs believed there was a positive customer overlap between the two brands. Not in that they were competing but rather catering to different wearing occasions. By leveraging Crocs' expertise and strong sales infrastructure, the company aimed to scale HEYDUDE's growth and accelerate its expansion.

At the time of acquisition, HEYDUDE was a fast-growing, highly profitable brand with EBIT margins over 25%. Crocs had high expectations, aiming to grow HEYDUDE's $570 million revenue in 2021 to $1 billion by 2024.

However, with 2024 now in the books, HEYDUDE's performance has fallen short of projections. The brand closed the year with $824 million in revenue, down from $949 million in 2023. As outlined in the company's Q4 earnings release, the 2025 guidance suggests a continued downward trend. The Crocs brand, however, continued to show strength, growing revenue by roughly 9% in 2024. It is projected to grow by another 4-5% in 2025.

Crocs is no longer just a shoe company known for its bold and divisive clogs – it has become a cultural phenomenon. Through a remarkable brand revival led by several high-profile collaborations and the streamlining of its operations, it has transformed from a quirky comfort clog company into a fashionable footwear force. Sure, they might still be ugly to some people, but Crocs, and their customers, don't care.