E-commerce is an increasingly important part of Crocs Inc.’s business, and the footwear manufacturer and retailer has promoted its vice president of e-commerce.
Adam Michaels becomes senior vice president of global e-commerce, a promotion from his position as vice president of global e-commerce. It’s Michaels’ second promotion in his four years with Crocs. He started with the company as director of North America e-commerce in 2013.
Michaels will head up what Crocs calls a new “global e-commerce function,” though the company did not provide any additional details in its announcement or on its fourth quarter earnings call. A Crocs spokesman could not be reached immediately for comment.
Michaels’ promotion is one of several executive changes at Crocs. CEO Gregg Ribatt will step down on June 1 and Andrew Rees, who serves as the company’s president, will take over and hold both job titles. Ribatt will remain on the company’s board of directors.
In its fourth quarter earnings release, Crocs, No. 224 in the Internet Retailer 2016 Top 500 Guide, reported global online sales in 2016 of $130.7 million, up 7.9% from $121.1 million last year. E-commerce accounted for 12.6% of the company’s revenue in 2016, compared to 11.1% last year.
“Given shifting consumer shopping patterns, we expect this channel to continue to grow in importance to the overall business,” Ribatt told analysts on the company’s Q4 2016 earnings call, according to a transcript from Seeking Alpha. “We’ve been improving our online customer engagement, accelerating our efforts around a mobile-first approach and allocating additional marketing dollars to drive further e-commerce growth.”
Rees says digital channels are providing the company with a better return on investment than other forms of advertising. “Consistent with our belief that digital and social (media) campaigns are the most effective means of reaching our target consumers, we’re are channeling the majority of our marketing dollars there and materially reducing our use of TV and print,” Rees told analysts. He didn’t specify how much greater the company’s digital and social ad spend will be in 2017 compared with previous years.
While online sales grew in 2016, e-commerce sales fell in the fourth quarter ended Dec. 31 to $33.097 million, down 9.7% from $36.653 million in Q4 2015.
“We saw some purchasing activity migrate from our sites to sites hosted by large e-tailers offering our product,” Rees said. “With [more] quality inventory compared to last year, we have less deep discounting and end-of-life product available.”
Crocs also plans to dramatically shrink its store count over the next two years.
It says it will close about 160 of its stores, or 28.7% of its 558 locations, with less than half of those closures taking place this year.
“It’s something that we’re going to have to re-evaluate on a constant basis,” Rees said. “The consumer is shifting out of [store] retail to e-commerce in this [U.S.] marketplace and many other marketplaces across the globe.”
- Total revenue of $187.4 million, down 10.2% from $208.7 million in Q4 2015
- Online sales in the Americas region of $19.36 million, down 12.6% from $22.16 million.
- A net loss of $40.6 million, compared with a loss of $70.1 million.
For fiscal 2016, Crocs reported:
- Net revenue of $1.036 billion, down 5.0% from $1.090 billion in 2015.
- Online sales in the Americas region of $72.9 million, up 7.2% from $68.0 million.
- A net loss of $16.5 million, compared with a loss of $83.2 million.