Crocs Responds to Bankruptcy rumors
July 16, 2009
Crocs has responded via a wordpress blog to the Crocs bankruptcy rumors floating online. CEO John Duerden stated the following:
As the article correctly points out, we face challenges resulting from rapid growth. We’ve taken action to address those challenges, including aligning our production capacity to meet demand, reducing our overhead expenses and the size of our workforce, and paying down debt.
This is the key part of the story, basically the last word… Debt.
We are living in a time where bank financing is difficult to come by and this is what led the NPR and others to report that the chances are very low that they can get the finanical aid they need. Let’s face it, Crocs isn’t “too big to fail”.
They are not going to get a bailout package. period. All the luck to them to get the proper financing, or have someone save them via a purchase… but the chances are that any potential buyer will find a better deal in bankruptcy court.
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4 Responses to “Crocs Responds to Bankruptcy rumors”
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I think the off-hand Bush-bash was kind of uncalled for.
Along with poor timing in expanding their capacity (taking on debt), Crocs also face massive competition from imitators. Add the fact that there is a longevity problem - they last too long. Essentially, “Crocs” are a fairly generic product and consumers can easily find substitutes at a lower price.
The company ended last quarter with 50 million cash on hand and 19.8 million dollars in debt.
Do the math (and the research). Crocs is not going out of business. Nowhere close.
I work for Crocs at an outlet mall. If you could see the number of customers we service each and every day…the question of bankruptcy would just disappear. We do an incredible amount of business. Our prices approach those in any retail establishment that sells the brand, but people buy five and six pairs at a time. It never ceases to amaze me. And for those left-wing non-participatory types that can think of no better reason to not want to wear something because G.W. Bush does…well, what’s next? Gonna stop using toothpaste?
If there were any real truth to the rumor, believe me I would single-handidly save them from bankruptcy. I am a relative new convert to Crocs, 1 year to be exact. I have 9 prs. so far with 2 more pairs on the way. As someone with chronic back pain and degenertive disc disease I have finally found a shoe that I can wear which not only supports my lumbar spine, but can be worn for 12 hours at a stretch without my feet aching. God Bless the genious behind Crocs and may they continue to exist well beyond my years. lol