Crocs Steps into Tier-2 and Tier-3 Chinese Cities

on August 8 2011 | in Fashion Retail | by | with No Comments

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Crocs took America by storm in the early 2000s—now, roughly ten years later, the unique clog is making its mark in China.

“Asia’s year-round climate is ideal for our type of casual lightweight footwear,” said Crocs president and CEO John McCarvel.

The clogs’ weightless durability was one selling point that made Crocs popular in the U.S., and the brightly-colored foam is proving successful in the Asian market as well.

“The Tier 1 market [in China] is taking product back into the Tier 2 and Tier 3 cities. We saw an appetite for the brand, so both our own investment in retail as well as with some of our distribution partners in each of the provinces there have really allowed us to kind of take that step forward this quarter and a platform to build on going forward,” McCarvel said.

In the second quarter of this year, Asian markets contributed the most to revenue for the Crocs group. Asian markets grew by 37 percent that quarter, bringing in a revenue of $122 million for the company.

Following the money, Crocs is working on plans to expand into Tier 2 and Tier 3 cities in China, as well as other Southeast Asian markets, in the near future. Crocs is optimistic that its expansionist momentum will help maintain healthy sales.

“We have no reason to believe that stock won’t trend well if the company’s near-term momentum continues,” said Mitch Kummetz, analyst at Robert W. Baird & Co.

Crocs expects a 30 percent increase in revenue for the third quarter in comparison to the third quarter of 2010. The company anticipates a third quarter income of about $280 million.

[wwd]

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