Crocs to buy shoe brand Heydude for $ 2.5 billion, Retail News, ET Retail
Consumers stuck at home during last year’s shutdowns have ditched dress shoes for more comfortable ones, in favor of companies like Crocs and Ugg brand owner Deckers Outdoor Corp. Demand has remained firm this year.
Crocs said it would pay $ 2.05 billion in cash, funded primarily by a term loan, and $ 450 million in Crocs shares issued to Heydude founder and CEO Alessandro Rosano.
“This is a good acquisition from Crocs. Heydude has been performing very well during the pandemic, although a little under the radar,” said Matt Powell, senior sports industry advisor at NPD Group.
Shares of Colorado-based Crocs fell about 15% at the start of trading.
“I think this is a big deal for Crocs and it usually makes investors nervous. I think in the short term it will impact margins as they merge and streamline processes,” Zachary said. Warring, CFRA Research analyst.
Heydude, founded in Italy in 2008, makes about 43% of its sales from online channels, Crocs said. The company, known for its lightweight casual shoes, is expected to earn around $ 570 million in revenue in 2021.
By comparison, Crocs, which makes 37% of its sales through its e-commerce division, predicted in October that its 2021 revenue would increase by 62% to 65% from the $ 1.39 billion recorded last year. .
Heydude has remained immune to production constraints caused by plant closures in Vietnam, as it mainly manufactures its shoes in China, Andrew Rees, chief executive of Crocs, told analysts in a phone call.
However, the brand has been affected by global freight issues and experienced significant delays and high costs to get its products to the United States, he added.