Crocs offers $2.5 billion for Italian brand, Heydude
Crocs Inc., the comfortable rubber footwear company has offered $2.5 billion for Heydude, a privately owned Italian footwear label, as the rubber clogs maker looks to cash in on the pandemic-led surge in demand for casual shoes.
Crocs said it would pay $2.05 billion in cash, funded mostly by a term loan, and $450 million in Crocs shares issued to Heydude founder and Chief Executive Alessandro Rosano.
“This is a good acquisition from Crocs. Heydude has been a strong performer during the pandemic, albeit somewhat under the radar,” Matt Powell, senior industry advisor of sports at NPD Group, said
“I do think it is a large deal for Crocs and that usually makes investors nervous. I think in the short-term it will have an impact on margins as they merge and streamline processes,” CFRA Research analyst Zachary Warring said.
Heydude, founded in Italy in 2008, brings about 43% of its sales from online channels, Crocs said. The company, known for its lightweight casual shoes, is expected to make about $570 million in revenue in 2021.
Consumers stuck at home during the lockdowns last year ditched dress shoes for more comfortable footwear, benefiting companies such as Crocs and Ugg brand owner Deckers Outdoor Corp. Demand has remained firm this year. It is expected that the wide-spreading Omicron variant of the Coronavirus will further drive sales for this segment of the market.
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