Following the release of Crocs Inc.'s second quarter financial results Tuesday, which showed revenue gains of 3.6 percent (landing it at $376.9 million), the company announced that it will be making some pretty major restructuring changes to its business.
No, that does not mean it will be redesigning its clunky plastic clogs, debatably the ugliest duckling of the footwear world.
There will, however, be some reductions in Crocs's product lineup, which the company has overexpanded in recent years. The plan is to refocus on and streamline its core line of molded shoes and shut down non-core product development.
Unfortunately, the cutbacks will also result in the closure or conversion of roughly 75 to 100 Crocs stores worldwide (18 have already closed over the course of the second quarter), along with a round of layoffs that will put 183 of its 5,000 employees out of work. The majority of the layoffs took place on Tuesday, and according to the company's release, they will result in cost savings of $4 million in 2014 and $10 million in 2015. The store closures, meanwhile, should reduce annual revenue by $35 to $50 million and expenses by $17 to $25 million.
On the upswing, Crocs is opening a new Global Commercial Center in Boston late this year, which will be the new home for merchandising, marketing and retail teams.