Post Malone, Christopher Kane & Balenciaga: Inside IR at Crocs

When Crocs, the maker of the iconic love-them-or-hate-them foam clogs, listed on Nasdaq in 2006, it made history as the biggest IPO for a US footwear manufacturer. And while the shoes might have dropped out of favor, with the stock price crashing on a number of occasions as recently as mid-2013, the Colorado-headquartered company has made an impressive comeback. 

It announced a restructuring plan in 2014, while a number of high fashion and celebrity collaborations and influencer endorsements helped make the brand hot again. To date it has sold more than 300 mn shoes worldwide – a far cry from the 200 pairs first manufactured and sold when the company launched at the Fort Lauderdale Boat Show in Florida in 2002.

Something else the company did after restructuring was to hire Marisa Jacobs, senior director of investor relations, to run the IR effort. Until Jacobs joined the firm in 2017, she says the company had had a period without anyone in the role and much of the program had to be created from scratch, including replacing the IR website, which had been in place from the start.

Here, Jacobs talks to IR Magazine’s Garnet Roach about some of the challenges and highlights of the role, where she would direct extra resources, and bringing investors to New York to witness the madness of the most recent Post Malone drop. 

The launch of the bright, clean new IR website, featuring the iconic clog, is a highlight of last year for Marisa Jacobs, senior director of IR 

Crocs is obviously an interesting story with lots of ups and downs and now these collaborations – can you tell me a bit about how those came about?  

Our first two collaborations were with two important fashion designers, Christopher Kane and Balenciaga, and emerged out of talks between our teams and theirs. But we’ve also been proactive. We knew US rapper Post Malone loved Crocs and frequently wore them, even on stage, so we reached out to him and he was excited about collaborating with us. The same is true with some of the other streetwear-focused collaborations this January and February.

Right now, we’re fielding more requests than we can handle and we’re having – I don’t know whether you want to call it the luxury or the difficulty – of deciding which ones are the most appropriate for us.

But IR really isn’t involved in anything I’ve just talked about. My role is to work closely with the public relations people in terms of knowing what they’re going to release and when, and to give feedback if I think their release will raise other issues or questions with investors. 

What was and is the response from the investment community to some of the collaborations? Balenciaga is obviously a very well-known brand but I wonder whether there are analysts out there thinking: who is Post Malone?

Absolutely! Many of them didn’t have a clue. But IR is all about providing context. Going back to your comment on how cyclical Crocs has been, when I joined the company at the beginning of 2017, I needed to re-establish credibility so investors would believe in our ability to do what we had committed to doing.

That obviously involved a lot of rebuilding interest in and demand for the brand – so when I talk to investors about these collaborations, the way the conversation tends to pivot is to use the collaborations as further evidence of the success we’ve had in both raising the visibility of the brand and bringing new consumers to the brand.

So whether or not they necessarily know who somebody like Post Malone is – or Balenciaga for that matter – once you explain who those people are and you put it in the context of ‘these are collaborations with highly influential fashion brands, retailers or entertainers who would not choose to collaborate with us if they didn’t see Crocs as a brand that is interesting, cool and provocative’, then it’s easy to see that these collaborations are critically important – not from a revenue-generating standpoint, because that’s not primarily what they’re about. But they’re incredibly important from a marketing and brand-heat perspective. 

How much preparation goes into this from the IR side, given that they have to remain so secret?

Honestly the collaborations don’t involve a lot of my time pre-launch for that very reason – they are being kept secret. 

But what I’ve tried to do with some of the collaborations is use them as an opportunity to showcase the brand to investors so, for example, when the second Post Malone drop happened recently, it coincided with a non-deal roadshow in New York. So I invited all the investors we were meeting with that day to come to our NYC store at 7.30 am to witness the enthusiasm and craziness when the doors opened. 

If I can piggyback on those kinds of events to allow investors to see the excitement around the brand for themselves, I certainly want to do that. 

In terms of IR, what changes did you implement when you joined Crocs?

When I got here, the role had been vacant for a while. IR was essentially limited to the quarterly reporting and doing an occasional conference or non-deal roadshow with the help of our external investor relations firm. 

My job has been to create an entire program from scratch. That involved so many things, including taking a strategic approach to IR so that it brought value to the business along with all the necessary tactics. Those tactics covered a lot of territory, including earnings preparation, rethinking our guidance – both in terms of what we guide and how we go about setting our guidance – preparing for the shareholders’ meeting, bringing more strategic content to our 10Q and 10K, establishing shareholder surveillance and targeting programs, tracking sell-side estimates and consensus numbers, and bringing intelligence from Wall Street and the marketplace back to senior management and the board.  

Above all, it meant giving the sell side and the buy side a go-to point of contact with someone at the company they could speak to any time about our strategy, our operations and our financial progress. To be an effective spokesperson, I had to forge relationships with all of our key business, functional and geographic leaders, to learn everything I could about the company and to ensure my knowledge remains current. 

On top of everything I just mentioned, at the start there were so many things that needed to be put into place to make the function fully operational, including the upgrading and expansion of our vendors and the creation of an investor database. I walked into a job without any records documenting our past interaction with Wall Street so I began creating one for every interaction and conversation I’ve had with the buy side and sell side. I use that to monitor who I’m talking to, what traction I’m getting from those conversations and how the tone of our conversation is changing over time.

In terms of our conference and non-deal roadshow activity, instead of just showing up, I instigated a very critical way of deciding which conferences and non-deal roadshows I want us to go to and in which locations, as well as who we will meet with and who I don’t believe it’s worth our time to meet with. It’s a lot of work, but I think the quality of our meetings has improved dramatically.  

And then what is completely new is having someone to serve as a source for bringing external information into the company. I believe a critical part of my job is to serve as a conduit between Wall Street and the senior management team and the board in terms of what I’m hearing, what people are saying about us and how we’re being perceived. I also spend a lot of time reading and keeping track of what’s going on in retail from both a macro and a trend perspective. That’s a whole level of intelligence being brought into the organization that never happened before.

And then, of course, there are always one-off projects. Something I was looking at recently was an analysis of the long-term guidance other people in the footwear industry have given and the accuracy levels of that guidance over time. Another big project was the investor communication around the redemption of our outstanding preferred stock, which happened in December.

What has been your biggest challenge in the role so far?

Early on it was literally just learning the business because although you just say you’re selling shoes and that sounds easy, we’re selling shoes in 90 countries, across three segments – Americas, Asia and EMEA – and each is driven by different kinds of dynamics. And then we also report our business in terms of our wholesale business, our retail business and our e-commerce business. And when you think of that in terms of a large grid, it actually becomes fairly complicated.

Today I would say one of the biggest challenges I face is logistical: trying to get enough time freed up for the CEO or the CFO to get out on the road as much as I would like them to be out. While they both appreciate and understand the importance of IR, it’s certainly not their only priority and given how international our business is, they already travel abroad quite a bit. 

I’m actually having an interesting conversation right now about the value of beginning to do investor meetings in Europe, which is not something we’ve done before. But there’s a longer lead time in Europe to get investors interested in you and comfortable with you, and while it may not be our top priority right now, it is important to start that effort. 

And what about your highlight?

There’s clearly success in just having come into nothing and established what I think is a very comprehensive, well-run department. But a highlight from last year was creating and launching a completely new investor relations website. The site we had was fairly abysmal, it had been here from the beginning and was very bare bones. So I spent a lot of time last year working to create a new website and I’m really pleased with the end result.

What are some of the top issues investors and analysts are asking about at the moment?

You referenced the fact that the brand is hot at the moment and that the classic clog in particular has been particularly hot so one of the key areas I want to talk about is why I believe this is not just a short-term trend, but a dynamic that has staying power for multiple years. I think the issue of the longevity of a clog cycle is an important topic.

Another critical topic is our decision to prioritize our sandal business. I think it’s important that our shareholders understand why we’ve made that decision and why we think we can be successful in that area. 

And then the third one, which is a bit more bizarre because I’m really limited in what I can say about it, is how we might be impacted if we go into a trade war with China or if tariffs are imposed on footwear. I understand the interest in the topic, but it’s very hard to talk about the impact of something that hasn’t happened yet and that remains hypothetical. That’s certainly a topic that comes up frequently at the moment. 

One thing we are able to tell investors, and that I think they find quite comforting, is that as currently being discussed, the tariffs on Chinese goods would only impact our sales in America, and less than 20 percent of that comes from China. 

If resources were no object what would you like to do better or more of?

If I had the ability to do one more thing it would be more international travel and spend more time with our teams abroad. The growth in Asia, particularly over the long term, is probably the most significant growth driver of our business. It’s where our business is least mature and where we have the most opportunity to expand. 

And each of those markets is so different – I would like to better understand how we do business in each of them, how the customers differ, how the dynamics are different, how the infrastructure is different, so that I could have a more nuanced discussion with our shareholders as to why I believe we are in a position to succeed in each of those places. 

Finally, I have to ask: do you have a pair of the five-inch Balenciagas?

I don’t! There were only a few hundred pairs made and they all went straight to Balenciaga for it to sell. Plus I think I would break my ankle if I tried to walk more than a block in them. I did try them on, though, and prance around a bit, which was fun!

But we do wear Crocs. The very first investor meeting I went to, I wore a very conservative business suit with high-heeled suede pumps. I was totally decked out in corporate attire and our CEO walked in in chinos and Crocs! Fortunately I had a pair of Crocs flats with me – I took off my heels and put those on. That was the last time I wore truly corporate attire to a meeting!