Have Crocs, Inc. (CROX) Hit Their Stride? Wolverine World Wide, Inc. (WWW), Deckers Outdoor Corp (DECK)

• New outlets — Crocs opened 201 retail sites in 2012, bringing its worldwide total to 537, and it expects to add 70 to 95 more this year. Most of these are full retail stores vs. pop-up kiosks, which the company focused on initially but is now shuttering in favor of actual stores. The majority is opening in Asia, followed by Europe, and Crocs sees these driving double-digit growth in that beleaguered region. The footwear also sold well in 2012 at “key partners” such as Famous Footwear and DSW (NYSE:DSW) — the $2 billion national  branded footwear and accessories chain that pushes Crocs hard in its stores and on its web sites. Additionally, wholesalers opened 1,300 new doors and about 560 new accounts globally during the year.

Threats

• Europe — Performance in Europe has been hurt by macroeconomic conditions and no immediate improvement is in sight. Revenue in the region accounted for 15% of the company’s total in 2012, compared to 17% a year earlier, and was the only negative in a year that recorded a more than 12% rise overall.

• Japan — Business fell 12% year-over-year in the fourth quarter, and the company sees this market as its most challenging in 2013. “Conservative consumers” remain reluctant to ramp up purchases, it says, while the yen’s decline continues its adverse impact on operations.

• Counterfeits — Protecting Crocs’ trademarks and other intellectual property, particularly outside the U.S., remains a costly challenge. The company scored a significant victory in December when 18 people in China were fined by local courts and sentenced to a combined 46 years in prison after police seized nearly 130,000 pairs of fake Crocs worth almost $10 million. This was part of the 600,000 counterfeits confiscated in China alone in recent years, but officials concede the problem continues worldwide.

The bottom line

Crocs, Inc. (NASDAQ:CROX) has been one of the more intriguing corporate stories of recent years. The rapid rise from an IPO that was already the largest in footwear history and the stunning fall a few months later are already the stuff of legend. But more important — and certainly more impressive — is the way management has addressed its problems. As a result, Crocs has managed to grow the market for the product that put it on the map while branching out with others that expand its presence.

Many of the headwinds Crocs battled during the past decade haven’t completely died down. And the casual footwear industry remains fraught with seasonal, competitive and trend/taste issues that present a constant challenge. But Crocs seems to have weathered the worst of it, and looks poised to continue its respectable comeback.

The article Have Crocs Hit Their Stride? originally appeared on Fool.com and is written by Howard Rothman.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.