I have to hand it to you, Rick. Taking a long-term bullish stance on a company whose growth rides on a pair of ugly rubber shoes is pretty courageous.

Sure, I know Crocs' (NASDAQ:CROX) current high growth rates are alluring -- almost too good to pass up. But the issue in question with this company isn't its performance now. The shoes are an "in" item, so of course customers are still rushing out to pick up a pair. But really, Rick, how long do you think this style can last?

Just because Crocs is expanding its selection of products doesn't mean it's immune to being deemed a faddish brand. Yes, the company is cash-rich and has plenty of dough to develop new products. But broadening its segments too much -- say, by building a clothing line -- could present problems.

I've seen retailers make the same mistake time after time, trying and failing to develop new segments to boost growth. Many companies get themselves in trouble by moving outside their niche. PacSun's (NASDAQ:PSUN) stretch beyond its core surfing theme into hip urban apparel and footwear stores was short-lived. Meanwhile, Quiksilver (NYSE:ZQK) purchased Rossignol, but quickly realized selling ski and snowboarding equipment was a costly mistake. It wound up putting the ski-maker up for sale just two years after the acquisition.

Crocs is known for its croslite PCCR material, and it needs to stick to selling shoes that can be made from that proprietary resin. Slapping its logo on shirts and pants will be a bust, since I doubt Crocs can compete with companies like Under Armour (NYSE:UA) or Nike (NYSE:NKE), the established leaders in the special-fabric-apparel world.

Analysts may have upped their guidance for fiscal 2008, but even if the company fulfills the new $2.69 earnings-per-share expectations, year-over-year growth will clock in at a mere 35%. That's quite a stark difference from Crocs' 181% compounded annual rate over the past two years.

The current forward P/E of 15 for Crocs may sound like a bargain compared to recent valuations, but its revenue and earnings growth rates have been slowing. When they eventually grind to a halt, Crocs will be left with an even larger stash of inventory, ultimately forcing the company to significantly mark down its products. The bottom line will drop, and Crocs' P/E won't look quite so cheap anymore.

There's nothing to be misunderstood here, Rick. The company is in the midst of profiting from a faddish trend (and kudos to Crocs for setting one). But not too far down the road, I suspect we'll see Crocs sold in costume stores, as kids dress up to mock gaudy styles that once were a hit.

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Fool retail editor Kristin Graham does not own shares in any of the companies mentioned in this article. The Fool's disclosure policy is certain that Koosh balls will be hip again any day now. Aaaaany day now.