Confessions of a Former Crocs Investor

• Report this Comment On May 08, 2009, at 4:19 PM, doggiepooh wrote:

  hi. i just ordered my third and fourth pair of crocs.. i have arthritis in my toes and these crocs do the trick...so comfy and wear well...beach , yard work . they do it all. and of course out for dinner alwys with my crocs....

• Report this Comment On May 08, 2009, at 7:16 PM, btown819 wrote:

  Rick,

  This article does a mediocre job of hindsight analysis. It is great at justifying your past position, but it doesn't point to evidence or clues to what you should have realized earlier. Yes, you made a wrong call but without the evidence of hindsight there isn't much in the article that would help you make better decisions in the future. The closest thing resembling evidence is the red flags on the inventory levels and AR collections.

  How useful would the lessons learned from this article be if they were applied to a stock such as Hansen Natural, symbol HANS without the benefit of hindsight? The argument implies looking at last quarter's earnings and revenue growth coupled with inventory and AR collections is what you should be doing. Your perceived prospects of the company should be able to turn on a dime as soon as their collection ratio drops or their inventory builds after one quarter. Is that it? I think those alone are pretty poor indicators of future performance and not very helpful advice. Next time focus more on "lessons learned" that investors can apply to their analysis of other investments. Judging by this article, the lessons here weren't learned.

• Report this Comment On May 09, 2009, at 11:12 AM, asll wrote:

  Rick,

  Yes, the 1Q drops in US and Europe were pretty dramatic, but also predictable in this severe recession, and not fair in the context of the company's ongoing right-sizing efforts.

  The fad-phase was the basis for a way overly ambitious growth plan, badly timed at the height of the housing bubble, and unsustainable consumer spending and debt.

  When the tide went out, the market saw only a morbidly obese man wearing nothing but bright orange crocs, and understandably, ran fast in the other direction!

  But Crocs loyal customer base remains and there are interesting new products such as the kids sneaker to hook new ones.

  And yes Asia and internet growth are most promising as a right-sized Crocs looks to shed some pounds.

  Back in fighting shape, sustainable growth will be the long-term goal.

  Call me a speculator if you like, but you, as a burned and washed-out long, are not fairly evaluating the turnaround story, which is starting to unfold, and that some seem to be anticipating by the recent move up.

  asll

• Report this Comment On May 09, 2009, at 11:50 AM, mikejw wrote:

  Nice article. I am just sad that I didn't keep my thumbs down position on CROX in CAPS. The shoes might be good for a few but they are UGLY and were just a FAD. Remembers KangaROOS?

• Report this Comment On May 09, 2009, at 12:54 PM, asll wrote:

  mikejw,

  Listen to new ceo John Duerden talk about fads on the recent CC. Lots of mega-brands today started as fads. Customer loyalty, expanding markets, moms buying several pairs at a time ... whatever crocs was 2-3 years ago doesn't change the fact that the brand will be around for a long while.

• Report this Comment On May 09, 2009, at 1:31 PM, RaiddinnRZ wrote:

  I never thought they were going to succeed in any sustainable measure over the long term. They appeared to have zero economic moat, zero proven long term success, and zero proven business model.

  Not only that, but they had zero track record for coming back from periods of week demand.

  Doesn't sound very investment grade to me.

  Weigh that against the fact that I only know of one pair of Crocs purchased by anyone I know and both the mother and the daughter wear the same pair of shoes (dont ask). They seemed to like it.

  Even with the positive report from people in the trenches wearing the things, I couldn't possibly make the call that it was investment grade. I am glad that I didn't.

  Even still, CROX is not on my watch list unless I hear it has a PE of 1.

  Raiddinn

• Report this Comment On May 11, 2009, at 4:19 AM, thisislabor wrote:

  You know what my problem is .. im not very materialistic, or maybe that's why I can smell a fad a mile away.

  I dont understand how their products are still around.

  I bet however, they will do really well in sales in asian countries. They tend to make a fad a cultural phenomenon.

• Report this Comment On May 11, 2009, at 9:48 AM, mpapile wrote:

  All you people snapping up crox and saying how it isnt a fad, and how you just bought your fifth pair... How old are you people? Did you just get off wearing your "big dogs" shirts? I have not seen one fashion conscientious person wearing crox in a long time!

• Report this Comment On May 11, 2009, at 11:07 AM, martinfools wrote:

  I agree with the above comment! How many people have you seen wearing Crocs lately. All the fashion conscious kids I know are wearing sandals and PINK flip-flops. They;re buying footwear, they're not buying Crocs. Crocs were a fad.

• Report this Comment On May 12, 2009, at 7:25 PM, hillbillydeluxe wrote:

  Rick,

  When is the last time you have been to the Doctor or Hospital! Need I say more, that is the only shoe's the wear and that is just one industrie.

  Check out the new tennis shoes I personally think there awesome. I will continue investing especialy right know.

  Alan

• Report this Comment On May 15, 2009, at 12:47 PM, rfaramir wrote:

  My wife loves her Crocs, my daughter loves her fake Crocs but they break too easily. I conclude that there really is something to Crocs as a product, more than a fad. But fad it was, at least as the market tells the tale. They will retain a loyal customer base, but the free market will bring them down to the proper size (with the faddishness removed from the market cap).

  Then, if they can avoid failing in markets they have no business entering, they will survive and maybe thrive on the strength of their unique product.

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