Crocs Fine-Tuning Game Plan to Keep Momentum Going
Crocs isn’t resting on current brand momentum, instead implementing measures to expand the brand’s reach with consumers and protect its merchandise margins. Working on a strategy to deliver differentiated assortments to retailers including athletic specialists Finish Line and Foot Locker, which will begin selling the brand across its various banners in the fourth quarter. Crocs is also instituting MAP pricing in the U.S. on 140 of its best-selling styles. MAP stands for “Minimum Advertised Price” and stands for the lowest amount that resellers agree not to advertise a product below.
In the third quarter, total revenues for Crocs rose nearly 16 percent to $362 million with wholesale up 12.4 percent and retail gaining 8.9 percent. Year-over-year pairage increased 6.2 percent to 16.9 million as the brand’s ASP (Average Selling Price) rose 8.8 percent to $21.36 on fewer promotions and discounts, higher prices on certain styles and more sales of Jibbitz charms per style. Digital sales increased 36 percent to represent 37.7 percent of the topline or an implied $136.5 million. Americas’ revenues, including the U.S., jumped 27 percent on a constant currency basis to $234 million.
“…I think we’re managing the marketplace in collaboration with our wholesalers in a very, very different way than we have in the past,” CEO Andrew Rees told analysts. “And we’re managing our inventory in a very different way than we have in the past…I think the shifting consumer mindset has only helped the brand. We make a product that is fun. It’s value-priced. It’s easy on and off. It’s easy to claim. There are a lot of both functional and emotional benefits to our brand. And I think it fits really well with where the global consumer is today.”