With moulded footwear brand Crocs reported to be close to bankruptcy, how can ‘fashion phenomena’ brands ensure their long-term survival?
A flurry of newspaper reports have suggested that Crocs, the iconic footwear brand that launched just seven years ago and became an overnight success, is close to bankruptcy.
The Colorado-based company fell into the red with a net loss of USStory text84 million (£112m) in the year to December 31 2008 and is struggling with a high cost base, high inventory and, ironically, the product’s own durability, which is said to be so good that fans of the brand do not need to make a repeat purchase.
Crocs Europe’s managing director Robin Akeroyd leapt to the brand’s defence this week, issuing a statement in which he said he was “extremely confident” about the future of the company, in spite of the fact the consumer press already appear to have the knives out for the brand.
From the Burberry check and the sheepskin Ugg, to the Von Dutch trucker cap and now the plastic Croc clog, there is a long history of fashion phenomena brands.
Despite the infamous chav connotations a few years ago, Burberry fought back, delving deep into its heritage to move itself back into premium territory.
Sheepskin footwear brand Ugg managed to introduce variations on the Classic Tall with which it first found fame in the early 2000s. Ankle versions and new details have ensured Ugg has stayed top of many Christmas lists season after season.
Von Dutch was not so fortunate and the brand was dropped almost as quickly as it was picked up, again in the early 2000s, after copies flooded market stalls up and down the country.
Brand consultancy Interbrand managing director Graham Hales said: “These are typically single-minded brands that don’t have a range. Once you get counterfeit in the market they can go from leading edge to trailing edge. There is the skill of stretching your brand appropriately and it is a balancing act.”
Maintaining pin-point vision of core brand values and watching levels of distribution is essential to longevity, according to Roger Wade, founder of fashion consultancy Brands Inc. “There is a future for Crocs if it can stick to its authentic heritage rather than chasing turnover,” he said.
Cheaper versions of Crocs’ signature shoe, the Cayman, are now widely available on the high street – Sports Direct had a range in for less than £10 a pair last year versus Crocs’ £29.99. This, on top of negative press surrounding Crocs’ fashion credibility, has certainly impacted sales while Crocs has not helped itself by opening high-rent stores across Europe.
However, there is a sense that Crocs could still work its way into some shoppers’ everyday wardrobes. Kids’ sales continue to be good. Darron Carnall, managing director of kidswear store Parklife in Whitby, North Yorkshire, said: “The core Cayman style still has a good following. Crocs are still a big part of our business.”
Crocs’ durability, comfort properties and practical nature – it was originally designed to be a non-slip sailing shoe – mean the brand has values to build on, although it is unlikely to reach the heady heights of 2007 any time soon. The question is whether investors – it is a public company in the US – have the patience to ride out the backlash.