Crocs following in Nike’s Footsteps with Wholesale Cuts
Crocs is following in the footsteps of Nike and Adidas by cutting wholesale accounts in North America.
“After careful consideration, we recently decided to prioritize wholesale partners who are aligned with our brand strategy and desired positioning in the marketplace,” CEO Andrew Rees said “We began terminating select North American wholesale relationships, a strategy many major brands have also used to maintain strong marketplace health.“
The digital revolution during the pandemic has emboldened many brands to trim their wholesale account base to focus on their margin-rich DTC businesses. Brands also are partnering more closely with key strategic wholesale accounts, especially pure play e-commerce retailers or those with a strong digital as well as brick-and-mortar business.
Rees made the comments on an earnings call Tuesday morning. Crocs Q1 earnings were off the charts with global revenue up 61% in constant currency to $460.1 million.
DTC revenue (stores plus online) jumped 93% while wholesale revenue increased 50%.
Americas was the strongest region growing a whopping 87%.
EMEA increased 41% and Asia grew 20% in constant currency.
Earnings per share increased 819% to a quarterly record of $1.47.
Crocs is expecting the strong results to continue. The company is forecasting Q2 revenue to rise 60% to 70% and full year revenue to rise 40% to 50%.