Consumer Surge in Casual Footwear Prompts Crocs to Buy Hey Dude for $2.5B

Crocs has said it plans to buy Hey Dude, a privately-owned footwear label, for the price of $2.5 billion, according to Reuters.

The rubber clogs maker has been looking to get more money out of the pandemic-era demand for more casual shoes, with the lockdown period of 2020 seeing people exchange dress shoes for more comfortable alternatives.

This has seen brands like Crocs and Ugg brand owner Deckers Outdoor Corp benefiting.

According to Crocs, the sale would go forward for $2.05 billion in cash to buy Hey Dude.

Hey Dude was founded in 2008 in Italy. The company gets around 43% of its sales from online channels, and it is is likely to make around $570 million in revenue in 2021.

The company has not been inundated by production constraints – it mostly makes its shoes in China, so it wasn’t affected by Vietnam factory closures.

Hey Dude was hit by global freight issues, though, with more delays and costs as it tried to get its products to the U.S.

Crocs, meanwhile, brings in 37% of sales through eCommerce. The October forecast said its 2021 revenue would likely grow 62% to 65% from the $1.39 billion it recorded in 2020.

Crocs said in October that it was having trouble meeting demand on long- and short-term sales goals, even in spite of supply chain headwinds, with demands outpacing supply.

Read on: Crocs Says Demand ‘Way Beyond’ Supply Amid Factory Closures, Supply Chain Snags

PYMNTS quoted Andrew Rees, CEO, saying that the company saw D2C sales up by 60% compared to 2020. He said the company was “very confident and optimistic about the consumer activity that we see both online and in store.”

Crocs in September had a plan to reach $5 billion by 2026 – which would mean a compound annual growth rate of 17%. The sales are likely to come from digital channels along with more focus on Asia, which could be the company’s fastest-growing region.