Crocs to run fewer holiday season promotions
(Reuters) - Crocs Inc (CROX.O), known for its namesake clogs, said it will offer fewer discounts during the all-important U.S. holiday season this year as the shoemaker focuses on promoting a new line of products.
"Last year we ran about 58 different type of promotions to different groups in our database ... this year it will be more like 20," Chief Executive John McCarvel told Reuters.
Crocs is planning to promote three collections this year in the United States and Europe -- fur-lined products, a boot collection geared for the rain, an d a new retro line of clogs.
"(Promotions are) hard to manage, consumers get confused (and) think everything is on sale all the time, which isn't the case," McCarvel said.
"This year we will be focused on better programs that last a little bit longer."
However, rivals Wolverine Worldwide Inc (WWW.N) and Skechers Inc (SKX.N) have launched discounts to pull in frugal customers.
Crocs, most of whose products are made from a proprietary resin material, is banking on new products like its retro line to boost sales during the holiday season and will sell the shoes at a slightly higher price. A majority of the company's products sell for between $25 and $50.
The company has been trying to reduce inventories, which stood at $187.6 million as of September 30, up 24.1 percent from a year earlier, with clogs accounting for about half of that. Inventories in the quarter included higher-priced new products brought in for fall and to stock the 35-40 stores the company plans to open in the current quarter.
The Americas accounted for about 45 percent of Crocs's total revenue in its latest quarter, while Europe's share was 13 percent. Sales in Europe fell 2.9 percent in the quarter.
McCarvel said the company plans to focus on promoting its new products in the European markets, which buy more of its traditional clogs.
"We are trying to get the consumer in Europe to think about us differently," the 55-year-old CEO said.
(Corrects para 7 to remove word "rubber"; para 8 to clarify nature of inventories and remove unsupported reference to declining popularity of clogs; para 9 to remove extraneous word "growth". Incorporates earlier correction of material used to make clogs.)
(Reporting by Aditi Shrivastava and Siddharth Cavale in Bangalore; Editing by Sriraj Kalluvila)