HeyDude is no longer flying. Now it is a dead weight for parent company Crocs, which had set itself the (failed) goal of getting it to USD 1 billion in revenues by 2024. Is it a product problem, a marketing problem, or both?
Ambitions
Crocs acquired HeyDude in 2022 for USD 2.5 billion and, as we said, set a goal to take it to USD 1 billion in revenues by 2024. The early days were encouraging, but then sales started to decline. Last October, HeyDude reported a double-digit drop in revenues. This is the fourth consecutive negative quarter. Now Crocs is forecasting a sales decline of about 14.5% for 2024, compared to last year.
The mistakes
Crocs CEO Andrew Rees explained HeyDude’s decline to Business of Fashion this way: “We were trying to keep up with demand, without really understanding where demand was”. Crocs flooded the market with HeyDude products, “but without devoting sufficient marketing resources to help acquire customers outside the regions where it was already successful”. Rees is now trying to revive the brand by addressing its reputation as a manufacturer of shoes for men who put comfort before style. For this reason, the group hired Steven Smith as design chief of Crocs and HeyDude, and some celebrities as testimonials.
The problem
“The biggest problem is that HeyDude produces undesirable footwear”, observes Jessica Ramirez, analyst at Jane Hali and Associates. “If a product is not good, an ambassador won’t move the needle. The problem with HeyDude is that the shoes are not attractive”. Rees announced that the new products will not deviate from the brand’s best sellers to avoid wider competition. Samuel Poser, analyst at Williams Trading, disagrees with his colleague Ramirez. The problem is not the product, but the brand management. And he took Ugg as an example: “You can always create demand if the brand is managed well”, Poser said.
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