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Crocs Latest Acquisition Of Heydude Fits Just Right

Crocs is expanding its product portfolio with its recent acquisition of international casual footwear brand, Heydude, for $2.5 billion.

Easy on the feet, but not on the eyes. Love em’ or hate em’, Crocs has created one of the unique brands in footwear due to its distinct design and focus on comfortability — and it’s been working. Believe it or not, an investment in this little fashion icon would have given more than 15-fold returns in the last five years, and it now boasts a market capitalization of over $8 billion. 

What does Crocs do?

Crocs manufacture footwear focusing on accessible, affordable, and comfortable fashion. Crocs’ underlying success has come from crafting a niche product among the masses, which has gone on to create a die-hard customer base. Crocs is also a top pick for environmental, social, and governance (ESG) investors, putting a focus on renewable packaging and materials, sustainability, and it’s aiming to cut its carbon footprint in half by 2030. 

What does Heydude do?

Similarly enough to Crocs, Heydude puts emphasis on sustainability, unique design, and the comfortability of its shoes. It’s a founder-led company run by current CEO Alessandro Rosano that’s been around since 2008, and it has had tremendous success in Europe and the U.S. having sold millions of pairs of shoes worldwide.

What does the acquisition mean for investors?

Well, it looks like a perfect fit — excuse the pun. But the companies’ values and mission statements do completely align with one another.

Although Heydude is a private company and its financials haven’t been disclosed, Crocs notes that it is a “high-growth, highly profitable brand” that it is adding to its portfolio. This bodes well. Considering Crocs already boasts impressive 73% year-over-year (YoY) revenue growth with industry-leading margins of 32% in its most recent quarter, it should be a great match-up.

Heydude will operate as a separate unit in the overall Crocs portfolio, in a similar fashion to how Coca-Cola manages its bunch of select brands like Powerade, Costa Coffee, and Innocent smoothies. It will be part of the overall Crocs family, but it will keep the existing management team at the helm, and just add to its board of directors. 

Takeaway

The move looks like a good one for both brands with the overarching goal of becoming one of the world’s most well-known brands in the sustainable footwear division. Even operating as individual units, it’s likely the companies will be able to benefit from manufacturing premises and logistics networks to introduce the corresponding brands to new realms.

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