#533 How Crocs Walk in the Shoes of Their Fans and Drive Global Trends With Anne Mehlman, Executi...

Thanks. I'm excited to be here.

I spent the beginning of my career, and most of my career, on the finance side. I joined Crocs in 2011, which was my first footwear experience. I'm from Colorado, so Crocs is an iconic Colorado company. I started in our finance department here, and it was pretty early in the company's history, so we were establishing a corporate finance department. It was pretty crazy back then, very entrepreneurial. I worked in the US, then went over to our European business and worked out of our Netherlands office. I came back, and we went through a pretty big transformation at Crocs. We ended up selling a piece of the company to Blackstone private equity, and they helped reshape our management team. That's when Andrew Rees, our current CEO, came in. I worked under him and we restructured the business. I did that for five years, worked at Crocs, and left in 2016 as Vice President of Corporate Finance, then went to Zappos.com, another footwear online pure play. I was CFO there, moved my family to Vegas, which was a lot of fun. It was fun being on the retailer side instead of the brand side. Zappos was owned by Amazon, so I learned a lot about pure play, Amazon, and worked with many footwear brands. Then Andrew became CEO of Crocs and invited me to come back as CFO in 2018. I moved back to Colorado, which I was happy about, and was CFO for six years through tremendous growth, COVID, and many unexpected things. Last year in May, I stepped into the brand president role of the Crocs brand. It's been a great journey.

Those are great questions. Starting with the growth piece, I'm really proud that we've grown every year as a brand since 2018. It's pretty amazing. Inception to date, we've sold over half a billion pairs of shoes since we became a company, so your four Crocs are a small piece of that. Thanks for supporting the brand. We reshaped the company under Andrew's leadership starting in 2015, 2016, and made the decision to focus on the iconic clog. We have this amazing shoe that is so iconic and recognizable. We created a category. People say, 'I have running shoes, I have Crocs, I have sandals.' It's a thing. We gave people the ability to personalize themselves with Jibbitz and that self-expression in footwear. Focusing on that and bringing the icon of molded footwear with personalization to consumers has driven that growth over many years and many markets. About 40% of our business last year was outside North America. That diverse distribution and connecting with consumers through our iconic clog has kept us relevant. From a finance side, as CFO you have a unique view of the company and see all the pieces. That's given me the ability to connect dots, read data, and understand what's happening to guide decision-making. I'm lucky to have an amazing team, the best in the industry, very experienced, who enrich my ability to help run the Crocs brand.

One of our strategic pillars is disruptive social and innovative marketing. We made the decision early on at Crocs to go 100% digital social marketing. That doesn't sound crazy now, but in 2016, 2017, it was a big deal. It allowed us to get close to our consumer, follow what was happening online, interact in the social conversation, and become part of the social zeitgeist. That gave us the ability to do unique collaborations and drive discussion around them. Early on, we collaborated with Christopher Kane and Balenciaga, big fashion houses, and started playing with that more. One of our most famous was the Post Malone collaboration. An intern noticed he was posting about Crocs and Jibbitz on social. None of us knew who Post Malone was in 2018. Our CMO at the time, Terence, brought it forward, and we did the collaboration. It was amazing. We were able to interact with not only our fans but Post Malone's fans and bring them into the Crocs brand. It's now part of our secret sauce. We collaborate across the spectrum, from Disney for big license properties to BAPE, which was an amazing collaboration. It might not be financially material from the number of pairs, but it was so popular there were lines outside the BAPE store in New York, and the police closed it down because it was so crazy. It sold out in minutes and drove amazing conversation and connection with our fans. I used to call it self-funded marketing as CFO because we make money and sell product, but it's about driving relevance and interest in the brand and connecting consumers who follow other brands as well as our own.

Handling the massive amount of data is a challenge for any company now. Synthesizing it and figuring out how to best use it is key. Some of the best data we get on the marketing side is through social feedback. Every day, we comb social media, understand trends, and think about how to bring that into our marketing campaigns. We listen to what the consumer is asking for. Two examples: we did a Crocs Lightning McQueen, which we called the Crewt for Croc Day, a fan design. The marketing and product team noticed fans wanted it, so we launched it two years ago and sold it on Croc Day, a fan-created holiday. Another time, there was a post asking for Lightning McQueen shoes in adult sizes, and fans started a change.org petition. Our marketing team said, 'If we get enough signatures, we'll make it.' We did, and it's sold out multiple times. We respond quickly to these small moments, which is part of our DNA. For bigger data, we look at macro trends and are exploring AI solutions. The world is changing fast, so we're watching it.

We are the leader in molded footwear. We created that category through innovation. How do we stay true to who we are—our classic, our icon, our personalization—while expanding into other categories? We've focused on sandals for years; it's in our DNA. We have an amazing sandal business that makes us one of the top sandal players in the world. It's molded, comfortable, at a good price point. Now we're looking at other places to play. We launched some great fuzz slippers last year that are doing well. We're also thinking about the sneaker space and how to play with molded DNA. We have our LiteRide In Motion Pacer, a new sneaker out this year, and we'll continue expanding that. We're thinking about how to bring comfort, molded expression, and personalization to other footwear categories, and then extensions like molded bags and accessories.

It's inherent to who we are. One of our brand values is being a democratic brand. We want to serve everyone—men, women, children—across all demographics worldwide. We stay true to our brand values. Our mantra is 'Come as you are.' We want to bring personalization, creativity, and expression to everyone. That allows us to serve across the spectrum on a foundation of comfort and accessible price points. We collaborate with everyone from Post Malone and NASCAR to BAPE and Disney, and internationally in China and Korea. We focus on consumers and what they want. We stay true to our values of accessibility and being democratic, and we think about trends in local markets. Even though the classic clog is our best seller everywhere, we can be locally relevant through Jibbitz, which allow personalization. We can bring cultural moments relevant in different countries through Jibbitz without making entirely new shoes. You can wear a white classic as a blank canvas and make it yours. In Japan last week, we had Sakura Jibbitz for the season, and we collaborated with a Japanese sticker company for unique designs. We can do that in any country for any cultural moment, which allows us to be culturally relevant without a huge, confusing footwear line.

Our purpose is bringing comfort for our communities, employees, and planet. For communities, it rooted organically in who we are. During COVID, we saw a need for shoes for healthcare workers. Crocs are great because you can sterilize them and they're easy on and off. We received massive requests but couldn't figure out how to get them out efficiently. Andrew called me, and I was CFO, saying we would give away $10 million worth of shoes. Our stores were closed, we weren't sure how we'd come out of COVID, and I was negotiating with banks. He said, 'Doing what's right in the world will always be what's right for Crocs.' He was right. It was an amazing initiative, one of the things I'm most proud of. Everyone came together—vendors helped with shipping, banks helped. People still come up to me and say, 'You gave my sister, my brother, me a pair of shoes during COVID.' It was so impactful. It grounded us in making a difference. We now have Jibbitz for Good, helping people step up to greatness, especially young people. We partner with Girl Up to allow youth, especially females, to step into greatness. On the environmental side, we use a bio-based resin, a more sustainable resin, blended into our classic clog. Consumers don't have to choose to be more sustainable; they can feel confident every time they put on Crocs they're using a more sustainable material.

I love that so much. We're trying to do a better job of creating adult versions. The Sulley slipper from Monsters Inc. sold out online quickly. It's very much in our DNA. The nostalgia point is important. Crocs were the first shoe many kids put on their feet because they're easy on and off. For many teenagers, Crocs are their first shoe, so they don't think it's weird to wear a molded clog. I think about who'll be the nostalgia play. I love the Bluey idea. My kids were into Daniel Tiger, so maybe that's an area. Fortnite for sure, or Roblox. I definitely think there's something there. And I love your Batman—that's the best Batman.

Great question. Many places in the world where you don't expect it. I've not been to a country where I haven't seen Crocs. I get emails from people traveling the world saying, 'There's a Crocs store in this tiny Italian town.' We're globally distributed in 90 countries. From a celebrity perspective, the funniest was Posh Spice, Victoria Beckham. She previously said she hated Crocs and would never wear them. Then she showed up in Mischief Croc boots. I thought, 'Wow, that's amazing.' We can turn haters into people who love the brand.

That would have to be my white classics personalized to me. It would be hard. I have white classics that I created. I have nine best friends; we do a girls trip every year. One year, I made everyone their own personalized classic, which was a lot of work to load nine pairs. Those are my personal favorite because they say everything about who I am. Also, I have sparkly gold classics that were my earnings classics as CFO, my good luck shoes. They remind me that we can do anything. It would be tough between the two.

Agreed. We should try to get product placement into that.

Thank you so much. It was a lot of fun. Appreciate it.