The Association of Volleyball Professionals, whose athletes compete on the beach in bare feet, has signed a fast-growing footwear brand as its new title sponsor.
Fueled by the sales of its colorful synthetic clogs, Crocs has grown to a more than $100 million company in just three years. The company will now be the AVP’s pre-eminent sponsor in a three-year deal that sources put in the low to mid-seven figures. The original asking price to replace Nissan as title sponsor was $5 million over three years.
The Niwot, Colo., footwear company, flush with cash after raising $96.9 million in a February IPO, sees the AVP affiliation as a marriage of lifestyle brands.
“We fit well,” said Crocs CEO Ron Snyder. “Crocs is a brand that’s comfortable, colorful and fun, and so is the AVP.”
Crocs signature shoes are colorful slip-on clogs, fashioned from molded resin, but it has expanded its line to include beach sandals. And the company plans to market “sand socks,” which could be worn during AVP tournaments, later this year.
Crocs Inc.
(NASDAQ: CROX)
2005 sales: $108.6 million (up from $13.5 million in 2004)
No. of employees: 260
Headquarters: Niwot, Colo.
Key executives: Richard L. Sharp, chairman; Ronald R. Snyder, president, CEO, director; Peter S. Case, senior vice president of finance, CFO
Range in stock price since going public in February: $20.32-$32.50
Market capitalization: $1.02 billion 
Sports properties
Crocs in February 2005 signed a sponsorship deal with professional triathlete Matt Reed, the reigning U.S. Elite National Champion. The company also joined the Grand-Am Series as a sponsor of the Turner Motorsport/H&R Springs/Crocs BMW M3, a deal that was not renewed for this season. Sources: Company SEC filings; SportsBusiness Journal research |
“I wouldn’t say Crocs is going to be our Michael Jordan, but this is a case where the property can help take the brand to the next level and vice versa,” said marketer Phil Guarascio, an AVP board member since 2002. “The AVP will take Crocs right into the middle of its lifestyle positioning in a way it just couldn’t do with only advertising.”
Crocs has grown meteorically to more than $108 million since launching in late 2002 as a boat shoe. It has gained popularity as a reasonably priced ($30-$60) shoe that’s fashionable and functional. A market cap at press time of slightly more than $1 billion shows the confidence of investors. Skechers, another trendy footwear brand that targets the same youthful markets, has a market cap of just under $1 billion despite more than a billion dollars in sales.
As competitors race to the market with knockoffs, the AVP relationship should help strengthen Crocs’ brand equity as it moves into new markets. “This will help us in places like Southern California where the AVP is strong, along with their East Coast events,” said Snyder, a beach volleyball player for the last 30 years who has his own sand court at home in Colorado. “We’ve done most of our marketing and sales activity in the middle states.”
Crocs’ marketing has been fairly limited, with some print ads in lifestyle magazines, using the tag line “Ugly Can Be Beautiful.” On the event side of the ledger, the company has supported grassroots lacrosse and triathlon competitions, and did a Grand Am team sponsorship.
Under its AVP deal, Crocs, which has never produced a television ad, will receive branded content, along with three to four commercial units on AVP telecasts on NBC, Fox and Fox Sports Net. It also gets rotational and other venue signs. Crocs will produce AVP footwear and sell its product on-site.
Consumer activation will begin at the AVP event in Tempe, Ariz., May 5-7. The Tour will stage 16 events throughout the United States in 2006. It opened its season with the Cuervo Gold Crown Fort Lauderdale Open earlier this month.
