Crocs hit with $19m loss after China errors
27/02/2015
New CEO Gregg Ribatt said while the company has made “significant progress” on a turnaround plan initiated in July, it still faced “a number of challenges”. “Some of which we can't influence, such as the strong US dollar and the speed of recovery from the slowdown at the West Coast ports,” he said. “Others, we can most definitely improve upon, such as the ongoing challenges in our China business.”
He said distributor partners in China purchased too much product in the first half of the year leading to excess inventory in the marketplace.
During 2014, Crocs closed 114 stores and will shut another 65 this year. It will open 35.
Mr Ribatt added: “While lower oil prices will impact our product cost in the future, much of it will offset price increases in our factory. We do expect to see some margin benefit in the back half of the year in our molded footwear. The near-term benefits of lower oil surcharges will mitigate global shipping inflationary pressures driven by capacity constraints.”
The company has revamped management in the past eight months, hiring Mr Ribatt, Andrew Rees as president, Michelle Poole as senior vice-president of product, Bob Munroe as general manager of the Americas and Claire Conley as vice-president of North American retail.
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