The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Crocs Inc said on Thursday it would buy privately owned footwear label Heydude for $2.5 billion in a cash-and-stock deal, as the rubber clogs maker looks to take advantage of the pandemic-led surge in demand for casual shoes.
Consumers stuck at home during the lockdowns last year ditched dress shoes for more comfortable footwear, benefiting companies such as Crocs and Ugg brand owner Deckers Outdoor Corp.
Demand for such footwear has remained firm as people have continued to prefer them even as they started venturing out more this year.
Crocs said the deal would be funded by $2.05 billion in cash and $450 million in Crocs shares issued to Heydude founder and chief executive Alessandro Rosano. The company would enter into a $2 billion term loan B facility and borrow $50 million under its existing senior revolving credit facility to fund the cash portion.
ADVERTISEMENT
Shares of Colorado-based Crocs fell nearly 3 percent in premarket trade.
“Even though Crocs management has done an amazing job with one brand, they now have another to add revenue and maybe even outperform Crocs in the future... Another plus is casual footwear is still outperforming,” said Jane Hali, chief executive officer of Jane Hali & Associates.
Heydude, founded in Italy in 2008, brings about 43 percent of its sales from online channels, Crocs said. The company, known for its lightweight casual shoes, is expected to make about $570 million in revenue in 2021.
In comparison, Crocs, which brings in 37 percent of its sales through its e-commerce division, in October forecast its 2021 revenue to grow between 62 percent and 65 percent from the $1.39 billion it recorded last year.
The deal, which is expected to close in the first quarter of 2022, would immediately add to Crocs’ revenue growth, margins and earnings, it said.
Following the close of the deal, Heydude will operate as a standalone division, Crocs added.
By Deborah Sophia; Editor: Krishna Chandra Eluri
Learn more:
ADVERTISEMENT
Why the Crocs Craze May Be Here to Stay
The polarising clogs invaded closets during the pandemic and are cementing their influence with streetwear collaborations and a new retail sales strategy.
Antitrust enforcers said Tapestry’s acquisition of Capri would raise prices on handbags and accessories in the affordable luxury sector, harming consumers.
As a push to maximise sales of its popular Samba model starts to weigh on its desirability, the German sportswear giant is betting on other retro sneaker styles to tap surging demand for the 1980s ‘Terrace’ look. But fashion cycles come and go, cautions Andrea Felsted.
The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.
Nordstrom, Tod’s and L’Occitane are all pushing for privatisation. Ultimately, their fate will not be determined by whether they are under the scrutiny of public investors.