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Jumpin' Jiminy Jibbitz

Maker of Crocs add-ons may earn $10 million bonus

Joanne Kelley, Rocky Mountain News

Published September 15, 2007 at midnight

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BOULDER - When an upstart company called Jibbitz agreed to be acquired by Crocs last fall, it had a chance to double its $10 million price tag if its quirky shoe ornaments met certain sales targets.

The bet appears to be paying off, especially for Sheri Schmelzer, the mother of three young children who co-founded the company in her basement with her husband, Rich.

With 1,100 variations of the Crocs accessories on the market and many more on the drawing boards, fans keep snapping up new Jibbitz. And the more Jibbitz they buy, the more pairs of Crocs they seem to need.

Even people who've shunned the much-mocked Crocs in the past have become willing wearers now that they can personalize them with Jibbitz charms that celebrate their favorite sports team or other obsession.

"We probably design 20 new ones a day," said Sheri Schmelzer, who had been a stay-at-home mom in Boulder until she started churning out so many Jibbitz she now works full time at company headquarters. "It's just endless, the possibilities."

Schmelzer, 42, sparked the idea one afternoon when she and her kids began decorating their Crocs with small items they found around their Boulder home.

When her husband walked in, Schmelzer exclaimed: "Look! We're accessorizing our Crocs."

The former software entrepreneur said he immediately knew the family had hit on something big.

"Coming from a patent background, I knew we needed to keep a lid on it," said Rich Schmelzer, 41. "I'm an inventor, so I know exactly what not to do."

The couple met when Sheri Schmelzer needed to find a roommate while studying for a psychology degree at the University of Colorado. She put an advertisement in the paper and Rich responded to it.

Now married for 11 years, they have 9- and 7-year-old daughters and a 5-year-old son. Each member of the family has at least several pairs of Crocs, many of which get left en masse at the family's back door.

Before the birth of Jibbitz, Sheri Schmelzer devoted most of her time to "raising babies and carpooling." The tall, lean blonde insists little has changed about her life now that she's flat-out busy expanding the company.

"I'm still working; I'm just not working at home," she said.

To celebrate their Aug. 9 wedding anniversary two years ago, they launched the Jibbitz Web site, jibbitz.com. The orders began rolling in. In the first year, the company sold 8 million of the snap-on charms.

"Once it started to take off, which was pretty much immediately, that's all I was doing," she said.

At first, she did most of the work herself and would comb through bead stores and fabric stores for the doodads she needed to make the shoe ornaments.

"I would call my mom in Parker and say, 'I need footballs,' " she said.

One day when she was busy gluing Jibbitz by hand in her basement, her kids went to the pool with their grandfather. As they were handing out Jibbitz to other kids there, they unwittingly bumped into Lyndon "Duke" Hanson.

Intrigued by the reaction children had to the Jibbitz, the co-founder of Crocs gave the Schmelzer kids a business card and asked them to have their mom call him.

At the time, Niwot-based Crocs lacked the wherewithal to be buying companies. Crocs itself has been in business for only a few years and went public less than two years ago. But executives met with the Schmelzers and advised them to go out and prove themselves some more.

Last October, about a year after the launch of the Jibbitz Web site, Crocs bought the company for $10 million and promised the Schmelzers another $10 million if the company could deliver more results.

"I think they're well on their way to making that," Hanson said. "They've certainly exceeded our expectations.

Jibbitz got a different sort of payout recently when it collected $1.8 million, plus attorney fees and other costs, after winning a patent infringement battle against Joinworld Industrial & Trading Limited and its principals.

The U.S. District Court in Nevada ruled Jibbitz owns all rights to the shoe charm designs copied by the defendant.

The company now has roughly 80 employees, including a team of staff designers who work out of its brightly hued headquarters in an office park east of Boulder's Foothills Parkway.

A round rug in Sheri Schmelzer's office reads, "All you need is love."

The name Jibbitz is shorthand for flibbertygibbit, a nickname given to Sheri because of her tendency to talk a lot.

Jibbitz recently moved to the new space when it outgrew its former offices on the Pearl Street Mall.

Some of the walls in its new building are painted lime green, orange and other striking colors - some of the same ones found in the Schmelzers' family home.

The couple apparently has no intention of moving on from the company. They packed up for a family vacation on the East Coast this month, taking their various gadgets with them so they can work remotely and keep churning out new product ideas.

While Rich Schmelzer no longer compulsively works while he is supposed to be on vacation, he says his wife now plays that role.

"I just sit and watch her work away," he said. "I don't think she knows how to take one."

Sheri Schmelzer holds the title of chief design officer, and Rich serves as president.

"I'm certainly more on the creative side," she says. "I didn't know how to run a business."

Although she dreams up new themes for Jibbitz, she also works with various big-name concerns to initiate licensing deals that allow the company to attract new markets for its accessories.

Harry Potter fanatics will soon be able to wear Jibbitz emblazoned with the Hogwarts sorting hat and the crests from the various houses.

Then there are the deals with comics superheroes, including Batman, Superman and Wonder Woman. Similar agreements with Disney, the NFL and the NHL also have expanded Jibbitz's appeal.

For at least $2.49 a pop, it's easy to spend way more on Jibbitz than the pair of Crocs that hold them.

The Schmelzers also have begun to cater to those who want Jibbitz but don't wear Crocs. A line of bags, hats and other products come with openings made expressly for snapping on Jibbitz.

"I've been having a blast," Sheri Schmelzer said. "I don't want it to stop."

or 303-954-5068

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