Crocs Inc. is an American company started, in 2002, with an idea of a comfortable boating shoe. After having sold all their stock, in 17 colors, at boating shows, the founders expanded their market. In 2006, the company listed on the NASDAQ Exchange and has a current market capitalization of $1.45 billion.
The company’s shoes are made from Croslite; its propriety closed-cell resin which is lightweight, eliminates odor and prevents bacterial and fungal growth. The material allows the shoes to perform both in and out of water, much like the amphibian crocodile—hence the name. Crocs Inc. has operations in three regions: the Americas, Asia and Europe; with Africa falling under the Asian market.
Gareth Kemp is the managing director of Crocs Inc. South Africa and is in charge of the company’s growth on the continent. A qualified engineer, Kemp left the South African Navy in 2002 and opened a retail store because he lost interest in seafaring. His career in the Navy was more about managing people than actual engineering, which was done by external contractors. Kemp says he was always interested in business as both his father and brother were
in business.
“I just had a calling to business and retail was a channel that I was quite interested in and just pursued it,” he says.
Loading...
In 2005, he was approached by the South African distributors of Crocs, Tiger Trade, and started selling for them. The distribution company was bought out by Crocs Inc. in 2009 and Kemp took over as the marketing and sales director. In 2011, he became managing director.
Crocs South Africa distributes into the Ivory Coast, Senegal, Ghana, Mauritius, Mozambique, Zimbabwe, Botswana, Namibia, Kenya, Uganda and Angola. Angola is its newest entry with the first store opened October 25.
“Keeping in mind the challenges around strict visas and currency control we’re happy with what has been achieved,” Kemp says referring to performance in Angola.
Kemp feels that Africa has huge potential and opportunity and is ready to deal with the challenges that lie ahead. Some of which he says are the stigma associated with the continent, language barriers and making sure you choose the right partners.
Crocs used to be something that only chefs and nurses would be caught dead in. Being on your feet for hours on end meant style took a backseat to comfort. According to Crocs, this need no longer be the case. The company has come a long way from the clunky clog. With more than 300 styles per season Kemp says the biggest challenge is changing people’s style perceptions about the brand. The footwear is designed in Japan, Italy and the United States. In moving towards diversifying their products, the company also has golf shoes designed with consultation from internationally renowned golf instructor Hank Haney.
“One of our slogans from the
past was ‘Ugly can be beautiful’,”
says Kemp.
Most of the product gets shipped in from China, warehoused in Cape Town and distributed to the rest of
the continent.
The research and development is market-specific. The product merchandisers go out into the field and find out what the customers want. All the global markets have an input in the design direction. The new ranges are then presented twice a year in Singapore. There are three distribution channels: retail, wholesale and online.
If demand grows beyond the company’s current capabilities then a factory on the continent may be a possibility, but Kemp thinks this is still a long way off.
Crocs earned a place in TIME’s “The 50 Worst Inventions” list alongside Farmville, Hair in a Can, Spam email and asbestos. The shoe was however included in the Design Museum’s book entitled “Fifty Shoes That Changed The World”. It was named one of South Africa’s ‘Super Brands’ in 2010, based on market dominance, longevity, goodwill, customer loyalty and overall market acceptance. There’s even a blog called ‘I Hate Crocs dot com’ as well as a ‘I Don’t care How Comfortable Crocs Are, You Look Like A Dumbass’ Facebook page with 1.6 million ‘likes’. Love them or hate them, Crocs don’t seem to be going anywhere.
“I must be honest, in the beginning I wasn’t a fan myself. It was quite a strange looking shoe,” says Kemp.
Last year, the company launched what it refers to as its fashion styles. Although the company is worried about moving away from its core market in the lifestyle and outdoor sector, to fashion, its customers don’t seem to mind. Kemp says the fashion range sold out in a month.
“We had to scramble to get more stock. It was certainly very refreshing and very exciting for us.”
Kemp admits they were worried about knock-offs in the beginning. The first batch of fake Crocs in South Africa came sometime between 2006 and 2007. He doesn’t feel that this affects the company much anymore since the level of counterfeiting has decreased as it’s getting harder to keep up with the various styles. The cost of a children’s pair of authentic Crocs does however make it easier for parents to buy
the counterfeit.
There’s a joke that goes something like this: “In a million years from now when aliens land on earth, all they’ll find are landfills with Crocs.”
Crocs are recyclable. There used to be an initiative where people would drop off their old Crocs and the company recycled them into new ones for the less fortunate. A hundred thousand pairs were sent to Japan after the 2011 tsunami. However, the recycling process became too much of a logistical nightmare.
The company’s 2012 second quarter results revealed that revenue for the quarter had increased by 12% to $330.9 million—the highest revenue level in its history. Asia was the best performing region with revenue increasing by 20.5% (as of June 30); there are 233 company-operated retail locations in the Asian region and Africa is benefiting from being a part of this market. In 2011, Asia experienced a 34% year-on-year increase, which was higher than the global increase
of 27%.
As far as the future is concerned, Crocs Inc. has partners creating spectacles, sunglasses and children’s clothes under license. South Africa is focusing on current operations and avoiding growing its retail arm too aggressively. The company wants to become a fully established footwear company. Who knows, the fashionistas may be won over.
Loading...