What was almost a great Canadian success story on two fronts

Tag : Colours Textile
The namesake shoe of Colorado-based Crocs Inc. isn't bringing inthe same rush of people as in their peak in 2004, forcing thecompany to ship its Canadian manufacturing south to Mexico afterless than six years in operation, putting more than 600 employeesout of work.
It only took two years for the company to go from the largestfootwear IPO in history to back-of-the-closet obscurity.
"Crocs bites the dust," Robert Samuels, an analyst at J.P. MorganSecurities Inc., said in a note.
Crocs CEO Ron Snyder blames the slowdown in demand on poorCroc-wearing weather and a dismal retail climate, but the moreobvious answer, as with any of-the-moment trend, is that people areshunning the shoes many feel are just plain ugly.
"The brand's popularity is in sharp decline, and it is tough toargue otherwise," Mr. Samuels wrote.
The plant's closure is the negative twist in what was almost agreat Canadian success story on two fronts: A Quebec City groupdeveloped the shoe while a Vancouver company has seen huge growthdistributing it. The closure is much to the dismay of Crocs Inc.
In 2002, shoe company Western Brands bought the rights to anon-slip, breathable resin clog developed by Quebec-based textilecompany Finproject NA Inc., which was already supplying thefootwear to other retailers in Canada. After Western rebrandedthemselves as Crocs Inc., and added a strap on the back of theshoe, an international fad was born.
The promise of comfort in a rainbow of colours made them a hitamongst nurses, gardeners and anyone who spends the day on theirfeet. By 2003, the shoes were selling in 9,500 stores in 70countries around the world.
In 2004, Crocs expanded its product line, added warehouses andshipping programs, and acquired Finproject, beefing up productionwhile cutting off the factory's other distributors, likeVancouver-based Holey Soles Holdings Ltd.
In an attempt to squeeze out their competition, Crocs startedlaunching lawsuits against companies with similar shoes citingpatent violation, but two international regulatory bodies haverecently overturned their claims to intellectual property rights.
"Western Brands was selling the shoe in the U.S., and we wereselling it in Canada," Holeys CEO Joyce Groote said in aninterview. "They bought up Finproject and then cut off the supplyto everyone," she said, adding that they had to move theirmanufacturing to China.
Ms. Groote sees Crocs' lawsuits as a business strategy rather thana legal entitlement.
Tuesday, Crocs said it will seek a review of a recent ruling by aU.S. International Trade Commission judge on whether Crocs may beallowed to block U.S. imports of what it considers copycatfootwear.
Judge Charles Bullock found on April 11 that there was no violationof Crocs' patent rights by companies the shoemaker claimed weremaking and selling knock-offs, the commission said.
Holeys has actually seen their sales grow from $60,000 to$18-million in just four years.
Financial Post, with files from Bloomberg