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Crocs cuts jobs in Jibbitz unit

Company points to redundancies, names new CFO

By James Paton, Rocky Mountain News (Contact)

Published January 17, 2008 at 12:05 a.m.

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Crocs shoes are decorated with Jibbitz at Boulder Running Co. in Boulder in September. Tanner Baird, 6, shown relaxing while his mother shopped, owns three pairs of Crocs and seven Jibbitzes.

Photo by Barry Gutierrez / The Rocky/2007

Crocs shoes are decorated with Jibbitz at Boulder Running Co. in Boulder in September. Tanner Baird, 6, shown relaxing while his mother shopped, owns three pairs of Crocs and seven Jibbitzes.

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Crocs, the maker of colorful plastic shoes, has cut the staff of its Boulder-based unit Jibbitz by about 20 percent and replaced the company's chief financial officer with a longtime Motorola executive.

Jibbitz will now have roughly 60 positions at its Boulder office, down from 77, but some of those jobs will be moved to another location, Crocs spokeswoman Shelley Forslund said. Crocs declined to say how many people lost their jobs or where other positions have gone.

"While there has been some consolidation, we're definitely growing," Forslund said.

Crocs, which has seen sales rise rapidly and has expanded into new markets and product lines, has added more than 300 jobs at its corporate offices in Niwot in the past year, she said.

Forslund called Jibbitz "a small, but important, part of our growth story" and said Crocs was able to identify some redundancy in its staff.

Sheri Schmelzer, the mother of three young children, co-founded Jibbitz in her basement with her husband, Rich. Crocs bought the maker of the quirky shoe accessories in late 2006 for $10 million.

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

Crocs furloughed many workers for a couple of weeks around Christmas, saying it temporarily "right-sized" its staff to address a slower and less productive time of year for office employees. Crocs said the move was not tied to sales activity and the workers affected by the furlough were able to take vacation time.

Crocs also named Russ Hammer as the company's top finance officer and appointed CFO Peter Case to a new position, senior vice president of the retail division. Crocs announced the changes in a news release Wednesday.

Hammer is Crocs' third chief financial officer since the company's initial public offering in early 2006. Caryn Ellison served in that role from November 2004 until April 2006, when Case took over.

Hammer, 51, spent three decades with Motorola, most recently as chief financial officer of one of the company's divisions.

Crocs CEO Ron Snyder said in a statement that Hammer's international experience would help the company expand. About half of Crocs' sales come from markets outside the United States.

"What I think is interesting is that in each market we go into, the demand exceeds what we expect," Snyder said Wednesday during a presentation in California. "We're in many, many markets. It's not just a U.S. story. We've got a global business here."

The company expects to sell its products in 1,000 stores in China by the middle of the year and is expanding into Russia, Snyder said.

The company has deals with the NFL, the NHL, Gaelic Football, Australian Rules Football, NASCAR and other sports leagues, and promised it has more global licenses in the works.

Snyder also said Crocs will be featured on the TV show The Apprentice at the end of the month.

Crocs projected 2007 revenue of $820 million to $830 million, up from $355 million in 2006. But it faces challenges, including lawsuits filed by shareholders. The European Union also ruled one of its patents is invalid, a decision the company plans to appeal.

Crocs shares have dropped by more than 60 percent since the end of October. A third-quarter earnings report triggered worries, including concerns about inventory rising faster than sales.

Talking about Jibbitz, which makes shoe ornaments that go for around $3 a pop, Snyder said, "We're going to very aggressively grow this business."

The news of the Jibbitz cuts was first reported Tuesday in the Daily Camera in Boulder.

Comments

  • January 17, 2008

    1:58 p.m.

    Suggest removal

    Oh_Wise_One writes:

    Good luck Crocs..... I don't own any, never will and think they are a fad that is ended.