Crocs: Is the stock a crock?

ByABC News
October 3, 2007, 4:34 PM

— -- A: It seems Crocs are biting back.

Crocs are popular casual shoes made from a soft plastic. The company calls them "a soft and lightweight, non-marking, slip- and odor- resistant shoe." You've probably seen people, especially kids, wearing these brightly colored clogs with holes in the top.

But recently, Crocs have gotten into murky water. Reports from media and parents about kids getting their toes caught in escalators has caused a stir. ABC News noted the potential danger of wearing any soft, pliable shoe on escaltors here.

Could these concerns hurt Crocs' stock? Certainly, its possible. If the news reports continue and parents decide the shoes are too dangerous, it could be an issue for the company and its stock.

But so far, it doesn't appear these concerns have hurt. The stock has been barely affected and I still see many kids wearing the shoes.

Perhaps a bigger danger, bigger than escalators, would be if the Crocs trend turns into a fad that fades. Shoe fashions are infamously volatile, and what's cool one summer can be dated in a year or two. If Crocs goes back to just selling its shoes to gardeners, that could be a problem.

The company seems to recognize this risk and has been diversifying. Crocs acquired Bite Footwear, which makes golf, orthopedic, running and fishing shoes. The company also sells other brands, including Ocean Minded sandals and Fury hockey gear.

If the popularity of Crocs eases, the company will need to rely on the other businesses it's developing. But then again, Crocs could become a must-have type of footwear for generations escalators or not.

Matt Krantz is a financial markets reporter at USA TODAY. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com.