Crocs - shares of the plastic footwear brand in meltdown

A favourite footwear choice of Kate Middleton, Al Pacino and even President Bush appears to entering the maturity phase of its product life cycle…

Crocs are the footwear in question. A combination of innovative use of lightweight plastics, superb advertising and eye-catching colours and styles made Crocs the must-have accessory for many last year.

However, the share price of Colorado-based shoe manufacturer Crocs fell by over 40% last week as investors analysed the news that worldwide sales of Crocs are expected to be lower in 2009 than 2008.

Since January 2008, Crocs’ share price has fallen by almost 90%.

Several factors are combining to slow the rapid growth in popularity of Crocs:

- A general economic slowdown with weaker consumer spending
- Crocs has already penetrated most of the major consumer economies worldwide (although Crocs management believe that there is further scope to enter new geographical markets
- Crocs are still a fashion item rather than an essential part of a footwear collection
- Crocs lost a European Union court case in which it was trying to protect a patent
- Excess stocks and competition from “me-too” products and fake Crocs

A great example to use when teaching product life cycle.