Why are Crocs Profitable Again?

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A sample of Crocs shoes on display in a midtown New York City shoe store.

TIMOTHY A. CLARY/AFP/Getty Images

Remember those ugly rubber shoes people used to like? They’re actually making a profit, or dare we say, comeback? Crocs, Inc. saw a sharp decline in 2008, losing 90% of its stock value in less than a year. Most thought those brightly-colored clogs dotted with holes would fade once the fad ended. But the company announced a surprising $5.7 million profit for the first quarter of 2010, compared with a $22.4 million loss a year ago.

Somehow, things have turned around. Was it the Croc high heels? The loafers? The fact that people will wear comfortable shoes no matter how ugly they are? The company’s push to make other fashionable shoes may have worked after all, shedding the traditional bright orange foam shoes image. In fact, on April 26, the company announced it would start making ballet flats. “If we make it a little more stylish, then we start to appeal to a larger audience,” the company’s CEO, John McCarvel, said. Indeed, the most successful of the company’s shoes seem to be the ones that don’t look like original Crocs at all. Perhaps that’s the point.

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