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Crocs knows how to pandemic

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Crocs sandals are seen in a store in Quebec City, July 25, 2008. Crocs Inc shares since January were down 87 percent as of Friday's market open in what has been a spate of bad news for the company over the past year, from slowing sales to lawsuits.

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NEW YORK, Jan 11 (Reuters Breakingviews) - Crocs (CROX.O) has a bounce in its step. The rubber-clogs maker said on Monday that it expects sales in 2021 to come in around 67% higher than the previous year. Shares have jumped fourfold in the past three years, more than twice the increase at sneaker companies Nike and Skechers USA (SKX.N). The $7 billion Crocs is putting its fortunes to good use.

In December Crocs said it would buy privately-held comfy footwear company Heydude for $2.5 billion. That’s just as the market’s love for Crocs seems to be tempering. Its shares have dropped a third from a November high. Even so Crocs' enterprise value, at almost 3.5 times sales, is still three times as rich as Skechers'. Crocs would surely prefer to get closer to the valuations of footwear brands with freshly minted shares including Allbirds (BIRD.O) and On (ONON.N), which trade at 9 times and 15 times sales, respectively.

That’s where Heydude comes in: Its shoes are both cozy and easier on the eye than Crocs' clunky creations. That could help as workers returning to offices start rediscovering business casual. (By Lauren Silva Laughlin)

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Editing by Richard Beales and Sharon Lam

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