Marc Ambinder covers a November 2006 visit to Colorado by President Bush and a recent visit by John McCain. McCain claims the footwear called Croc was an American invention, its manufacturer employs lots of Americans, and provides us with a source of exports. If that were all true, does McCain not understand that his promotion of dollar appreciation could lead to lower export demand, which will in his own words be a barrier to our access to foreign markets and:
have a devastating effect on our economy and jobs, and the prosperity of American families.
Crocs weren’t invented by “a couple of entreprenuers” in Colorado, let alone by Duke Hansen. They weren’t even invented in America. They were invented in that Great Frozen Socialist Paradise to the north. You read that right: Ugly neon-hued foam shoes are another diabolical innovation for which we can Blame Canada. The company that invented them was subsequently bought by Hansen and two other aforementioned Colorado entrepreneurs, who added the cute name and the marketing gloss. But the shoes are still made abroad, in the original factory in Quebec, where the employees come pre-equipped with their own health insurance. Or at least, they will be for a few more weeks: in April, the company announced that they will close down the Quebec City plant in July, sending the 670 jobs there to plants in Mexico, Brazil, and beyond.
Did someone say NAFTA? But we are not done:
Following a solid IPO in 2006 and a strong 2007, their sales have been off dramatically this year. The company’s published fundamentals look OK, but sell-through sucks, and their current stock price is down 82 percent from this time last year. In other words: it’s a Great American Business that’s showing signs of getting hammered in a Republican recession. Also, there are now at least three shareholder lawsuits in the offing. Evidently, some investors suspect that the owners knew more than they were telling when they dumped large quantities of their own stock late last year, just before it all went to hell. In other words: It’s a Great American Business that’s run by Republicans, who are evidently getting everything their generous donations to the GOP paid for: presidential puffery, scrupulously indifferent SEC oversight, low taxes— and a tanking economy that’s left fewer and fewer families in a position to pay $35 for a pair of kids’ shoes.
A “Great American Business”?
Update: It always helps to check the SEC 10-K filings, which for Croc says in part:
In 2007, international sales accounted for approximately 48% of total revenues in 2007, compared to 32% in 2006 and 7% in 2005 … In the year ended December 31, 2007, we manufactured approximately 17% of our footwear products at our Company-operated manufacturing facilities in North America, Italy and Brazil. We obtained the remaining 83% of our footwear products from third-party manufacturers in China, Bosnia, Vietnam, Romania and the U.S. In the year ended December 31, 2007, our largest third-party supplier in China produced approximately 56% of our footwear unit volume.
Domestic sales were still over half of total sales but it appears that domestic production was less than half. So Croc is a net importer of shoes with most of their shoes made in China. McCain is holding this company up as an example of how we can export more to the rest of the world but in truth, it is more of an example of how we purchase shoes made in places like China.
If you are interested in how well their stock has performed over time, check out this chart.