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What’s Next for Hey Dude Under Crocs?

It’s been roughly three months since Crocs Inc. announced that it had acquired Hey Dude, and change is under way to integrate and grow the comfort-casual footwear brand.

Last week, retailers posting to the Shoe Dogs United group on Facebook reported that Crocs had “fired all the sales reps” for the Hey Dude brand, prompting speculation that the clogmaker was planning to pull Hey Dude out of the specialty retail channel to focus on direct-to-consumer markets.

The company has notably taken that route with its core Crocs line in order to maintain more control over its brand image, distribution and pricing. It is an industry shift that has been growing quickly in the past two years, accelerated by the pandemic and widespread changes to how and where consumers shop.

In a message to FN this week, a spokesperson for Hey Dude explained that the staffing change was part of a company decision to bring the brand’s sales operations in-house.

“This is an important step in aligning our culture and talent with Hey Dude’s long-term, strategic goals,” the statement said. “While existing sales representative agreements with contractors at Lucky Top Inc., who support the Hey Dude brand, will end effective April 1, 2022, we have invited these same individuals to consider joining in our next phase of growth and development by applying for full-time sales positions at Hey Dude.”

The brand spokesperson also addressed Hey Dude’s overall sales and distribution strategy going forward: “We currently have a healthy business with independent retailers and we will continue our partnership with strong and differentiated independent retailers that will elevate the Hey Dude brand and allow us to deepen connections with our consumers. There are no other planned changes at this time.”

At a valuation of $2.5 billion, the deal to acquire Hey Dude marked Crocs’ biggest investment to date and its official transition from a single to multi-brand company. Crocs has said it expects the brand to see between $700 and $750 million in fiscal year 2022, in line with its goal to make it a $1 billion brand by 2024.

In a presentation for the ICR Conference in January, Crocs CEO Andrew Rees noted that Hey Dude and Crocs should be viewed as synergistic, yet independent brands with strong potential for growth. “We can leverage the playbook that we’ve effectively executed within Crocs, within Hey Dude,” Rees said, referring to innovation, focus on a core iconic silhouette, and marketing to new consumers.

To make Hey Dude even more profitable, he added that Crocs will invest in marketing for brand awareness, digital capabilities, and supply chain networks.

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