This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Crocs Puts Best Foot Forward in Restructuring

Stocks in this article: CROX BX KKR

NEW YORK (The Deal) -- Crocs (CROX - Get Report) said late Monday it would exit badly performing stores, slash jobs, and streamline operations, sending shares of the plastic clogs retailer up more than 12% on Tuesday.

Niwot, Colo.-based Crocs said it would explore strategic alternatives and terminate product development of unspecified non core brands; shut down or convert between 75 and 100 company-owned storefronts - 18 of which will be impacted in the second quarter of 2014; and cut 183 jobs, most of which will be implemented immediately.

"The No. 1 priority is improving the operating margins of the business, focusing the organization on the right products and right geographies," Crocs CFO Jeff Lasher said in an interview Tuesday. "We have a couple of business units that we're not really sure make sense for us going forward," he added, noting this could refer to pure brands such as its Ocean Minded slip-on shoes and sandals or other more product line-oriented units.

The strategic plan will help the company reach 12% operating margins over time, Crocs said. The reduction in headcount is expected to result in $4 million in savings in 2014 and $10 million in savings in 2015, while store exits will trim sales by between $35 and $50 million. Lasher said between 25 and 30 of the store closings will be in the U.S.

"There is now a very publicly detailed strategic plan," said Steven Marotta, a footwear and apparel analyst with C.L. King & Associates. "Crocs has a high profile partner in Blackstone, a high quality president in Andrew Rees and a new CEO yet to be named - that's a nice recipe for investors to get excited."

The news sent shares of Crocs, trading on the Nasdaq, up 12.4% to finish at $16.68 Tuesday, bringing the company's market capitalization to about $1.46 billion.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs