Monday
Aug102009

Crocs Walking Away From AVP Sponsorship

August 10, 2009: Crocs shoes, which swept across the nation several years ago but now is struggling to keep its footing, said it would end its title sponsorship of the Association of Volleyball Professionals Beach Volleyball tour when the season concludes in September. Crocs and AVP have been aligned since 2006. Many of the executives who were with the company at the time have since departed, as has Leonard Armato, the former CEO and president of AVP.

Crocs said it has bought out the remainder of its contract. Financial terms were not disclosed. AVP said it is in "talks with several brands regarding 2010 tour sponsorship and beyond." Analysts put the deal at $2-3 million a year, which also included exclusivity in the footwear category.

The move comes less than a week after Crocs reported that its Q2 revenue fell by 11% to $197.7 million, with losses reaching $30.3 million compared with a net profit of $2.1 million a year ago. The company said overseas markets accounted for 64% of Crocs’ global sales last quarter, with Asian sales increasing 31% over second-quarter 2008 figures.

John Duerden, who joined Cros in March as CEO, said in the Q2 statement that the company would return to profit in 2010 after an aggressive cost-cutting campaign that to date has included 2,000 job cuts. "We've taken action to address those challenges, including aligning our production capacity to meet demand, reducing our overhead expenses and the size of our workforce, and paying down debt," Duerden said in a statement. Regarding leaving AVP, Duerden said, "We are very proud of the great partnership we have had with the AVP over the last several years."

AVP Sponsors Extend Deals Amidst Executive, Star Turnovers

Q&A: Leonard Armato (Feb. 2009)

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