As Demand for Crocs Soars, the Brand Is Breaking Up With Some Longtime Retailers

As demand for Crocs soars, the brand is breaking up with some long-time retailers — a few weeks after Nike cut ties with some of its own partners.

In a statement to FN, Crocs confirmed it has started to terminate select North American wholesale relationships, noting that this is a strategy many companies have employed through the years to maintain brand positioning. “We are grateful to these partners for their past investment in Crocs. Looking ahead, we look forward to further elevating the brand by investing in our key product pillars, powerful social and digital marketing and a prioritized distribution model led by digital commerce,” a spokesperson told FN.

The company — which saw wholesale revenues grow 52% in the fourth quarter — said it would prioritize partners and retailers who are aligned with its strategy and positioning in the marketplace. Last year, it started selling to Foot Locker and Finish Line.

While Crocs didn’t confirm how many retailers it was exiting, it appears the decision has heavily impacted the independent sector, which was facing deep challenges even before the pandemic.

FN viewed a letter sent to an unknown number of retailers this week. In it, the clog maker said it would cancel open purchase orders as part of the decision to end the sales agreement on April 30. That appeared to leave some storeowners reeling, with many wondering what brands would be good replacements for Crocs at a time when versatile, comfort-driven styles are keeping many independents afloat.

As it trims its wholesale roster, Crocs plans to double down on digital. Global e-commerce revenues were up 92% in 2020, a momentous year for the Colorado-based company. Crocs, which took home FN’s 2020 Brand of the Year award, saw overall revenues grow 12.6% to $1.39 billion, while adjusted diluted earnings per share doubled, to $3.22 from $1.61.

Crocs’ strategy mirrors other major shoe players, most notably Nike, and reflects an overall industry shift away from the traditional wholesale model. It’s a trend that has intensified during the pandemic, and now retailers large and small are scrambling to find new and innovative ways to build brand partnerships and keep vendors engaged.

Both Nike and Crocs have proved to be largely pandemic-proof, thanks to a constant flow of hot product, strong brand awareness and tight connections with consumers, including the coveted Gen Z demographic.

And while Nike has long topped the list of teens’ must-buy brands, Crocs is quickly gaining traction with Gen Z. In Piper Sandler’s just-released “Taking Stock With Teens” survey, Crocs ranked No. 8 among teens’ favorite brands, compared with No. 12 in last spring’s survey; it ranked No. 9 in the fall. Collaborations with Justin Bieber and Bad Bunny have helped generate notable buzz with the demographic.

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