Crocs took over teenager shoes and increased his stock

Bibiane Huang has a pair of Crocs for each day of the week.

The 16-year-old from San Francisco had her first pair at the age of five, with a very cool "Dora the Explorer" print. But last year, she began looking for comfortable shoes that she could easily wear before and after swimming practice, and she found a pair of green hand shoes in the classic hoof style of Crocs.

"I wore Crocs every day, and then people started making fun of me!" she called back. "But then people started to notice me, and then everyone started wearing Crocs."

Today, Huang is proud to own seven pairs in a rainbow of colors and is far from an exception. She estimates that more than half of the girls at her school also own a pair of what Time Magazine once called "worst inventions".

According to Piper Jaffray's spring survey, Crocs is the 13th most popular shoe brand among middle-income teenagers. He rose from 30th in 2017, although last year he was 12th.

On Monday, the company's shares were overweight relative to their neutral position by the bank, citing "solid traffic during the summer season". Analysts were also enthusiastic about Crocs' collaboration with Vera Bradley, who was exhausted on the websites of both companies. They raised Crocs' goal from $ 22 to $ 27, pushing the stock up more than 6% Monday to more than $ 22.

"We are having a wonderful time," Terence Reilly, the company's chief marketing officer, said last week. "Teens are an important driver for our brand, they spend a lot of money and youth culture is the engine of culture."

Crocs shares have increased by 30% over the last year. In November, its stock jumped 15% after announcing third quarter earnings exceeding analysts' expectations by 128%. The company has continued to exceed expectations in the last two quarters and is now valued at $ 1.6 billion.

Although the stock is down 15% since January, it's because "the demand is so good that they still can not keep up with the supply," said Sam Poser, analyst at shares in Susquehanna. The company transports goods by air to the country in order to replenish stocks of fast-selling items, which reduces their gross margins. "It's a good problem, and people are always hungry for products," he said.

Adolescents agree that the popularity of the shoe shows no sign of stopping. But that does not mean that his reputation for being ugly fades.

Julianna, a 17-year-old teenager from Teaneck, New Jersey, who asked for her first name to be used, said many of her friends wear Crocs precisely because they are considered ugly.

"People want to wear it because it's rude." It's like rebelling against anything the company thinks is wrong, "she said. "I've always thought that they were ugly, but then everyone started wearing them and it became a trend.Everyone I know has at least one pair."

The company's products are about to explode in popularity, partly for this reason, according to Jocelyn Thornton, executive vice president of the Doneger Group, which forecasts fashion trends.

"Crocs strikes at the things that matter to consumers – consumers are moving away from the conventional idea of ​​beauty and, at the same time, they are definitely investing in products that are comfortable to the touch and comfortable to wear", he said. she said. "At the present time, this generation of consumers does not feel indebted for a certain standard of style that past generations have."

The shoes also allow teens to express their individuality with Jibbitz, or charms they can attach to the top of the shoe, said Victoria, 14, of Warren, New Jersey, who also asked CNBC to do not give his last name.

"People want to be weird and it's becoming a trend," she said. She estimates that one in three girls in her class owns Crocs. "All popular people have them."

And the company feels no need to flee this reputation.

"We know we're different and unique – some might call it ugly," said Reilly. "We embrace this polarization, it attracts attention."

Young consumers are also increasingly turning to styles they consider "retro". Crocs has a nostalgic note because many have worn shoes in his childhood, like Huang with his pair "Dora".

"For this Generation Z teenager, we were often her first shoe, we went out in 2002 and she has remembered us since her youth and what started as a wonderful nostalgic moment for her," said Reilly.

And this is not the only company to capitalize on a booming revival of the '90s.

Footwear brand Fila Korea recently witnessed an upsurge in its Disruptor 2 sneakers, first marketed in 1996. This thick white shoe has a sawtooth sole and is reminiscent of the popular "daddy" sneakers of the 1990s. Fila sales increased 205% between 2016 and 2018 and the Disruptor 2 was named "Shoe of the Year" in 2018 by Footwear News.

"Young consumers are really reacting to legacy and authentic brands, and I think that's largely a result of what we're seeing," said Beth Goldstein, an analyst at NPD Group.

Fanny sacks, another staple of the '90s, are the fastest growth in the sack market this year, with sales up 50%, according to NPD data. "If you look back, it was considered dorky and ugly," Goldstein said. "It has been very popular and continues to grow."

Sporting companies such as Nike, Adidas and Reebok have also brought back styles from their 1990's collections. Many sports shoes in the new versions of the brand are similar to Fila's shoes and feature thick silhouettes evoking memories. retrograde caps and neon windbreakers.

Although it may seem hard to imagine, many of these appearances have gained traction on the track. They have been shown in collections of luxury fashion brands, according to Thornton's Doneger Group.

"The ugly trend in the shoe industry has really started and is taking root in Balenciaga," she said, whose version of dad's sneakers was selling for $ 900 or more. "The send-off to become ugly, it's the upscale."

Recognizing that it could cause a sensation, Crocs and Balenciaga collaborated to design a collection of brightly colored clogs, featuring 3-inch high platforms, which swooped down a Parisian runway. last year.

Since then, the company has continued to try to expand its audience through collaborations.

Last November, a pair designed by Crocs with rapper Post Malone was sold in 10 minutes. The company has also found partners in streetwear brands adored by younger consumers, such as Alife and Chinatown Market. In June, Crocs announced a collaboration with Vera Bradley.

"No matter who we collaborate with, it's unexpected," Reilly said. "It generates press for us and keeps our brand relevant."

Even if the shoe is in fashion, it's hard to know if Crocs will be able to withstand the ups and downs of the fashion cycle, waves that the company has already known in the past.

But his current marketing strategies could help contain the turbulence, according to Goldstein.

"Collaborations do not necessarily generate as much volume, but it's the visibility they get," she said. "The sheer scale of their type of collaborations, from streetwear to Vera Bradley, shows their ability to capture many consumer groups."

All that Huang knows is that something works. "I think ugly is a new trend," she said. "I do not know of any other brand, but I see a lot more Crocs in the street, and people are influenced by that."