The Niwot, Colo.-based company last week appointed John Duerden to the post of president and CEO, effective March 16. Ron Snyder, who currently holds the position, will retire, but plans to remain on the board. Duerden was employed by Reebok earlier in his career and served as president and COO from 1990 to 1995. He joins Crocs from Chrysallis Group, a brand development firm he founded in 2006.
“Someone with a footwear and branding background could help [the company],” said Jeff Mintz, an analyst at Wedbush Morgan Securities. “Judging by Duerden’s resume, he could be the right one to do it.”
Mitch Kummetz, an analyst at Robert W. Baird & Co., was also upbeat about the Duerden pick, but noted that Snyder was an asset to the company during his tenure. “You have to give Ron credit for what he accomplished, at least initially,” he said. “He helped establish Crocs as a brand.”
Snyder will remain on board during a transition period, which the company estimated will last two to four months, or longer. “It’s hard to tell what happened internally,” said Mintz, “but it makes sense with what’s happened with the [financials] that [Snyder] would step aside.”
In its fourth-quarter earnings report, Crocs reported a net loss of $33.2 million, or 40 cents per diluted share, while sales declined 44 percent.
But despite recent financial woes, analysts are hopeful about the future.
“They can turn the company around,” said Mintz. “There is a core customer for the brand, and they need to target them and do a better job to produce footwear for that customer.”
Kummetz agreed, and predicted that the biggest challenge going forward will be to build a cost structure to match the size of the business today. “They lost their way ramping up the distribution as quickly as they did,” he said.
“Crocs’ rapid market penetration was like magic dust, and the stock soared unrealistically high. Now it’s unrealistically low,” said retailer Richard Polk, owner of Pedestrian Shops in Boulder, Colo.
At press time last Thursday, the stock was hovering around $1.29, a sharp decline from its 52-week high of $25.53 last February.
But Polk still sees opportunity for the brand. “The new styles continue to sell very well in our store, and there’s tremendous appeal for the product,” he said. “Crocs are truly unique.”