Beleaguered shoemaker Crocs, Inc. (NASDAQ:CROX) announced today that CEO John McCarvel is resigning as part of a new partnership arrangement with The Blackstone Group L.P. (NYSE:BX). Blackstone is also providing Crocs with a $200 million cash infusion as part of the deal. The cash will be used as part of a planned $350 million share buyback plan designed to bolster the stock price.
Crocs, Inc. (NASDAQ:CROX) first became a household name a decade ago when its colorful rubber clogs suddenly became hugely popular outside of institutional settings, and Crocs was an instant success story. Things have have not been going so well since mid-2011, as changing fashions have resulted in a sales slump, especially in Europe and the U.S.
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According to a statement from Crocs, Inc. (NASDAQ:CROX)’s chairman Thomas Smach, “The partnership with Blackstone provides access to new resources and additional experience that we believe will positively and meaningfully impact the company’s future performance.”
“We will recruit a new chief executive who will work with the reconstituted board to refine our short-term and long-term strategic plans, which will include a sharper focus on earnings growth with less emphasis on top-line growth.”
The Blackstone Group L.P. (NYSE:BX) will get two seats on the board as part of this new partnership arrangement with Crocs, Inc. (NASDAQ:CROX). The company statement also highlighted how having Blackstone on board will bring significantly more retail and international expertise to the Crocs brand.
Crocs, Inc. (NASDAQ:CROX) shares rocketed up on the news of the deal. Shares were trading up $2.59 at $19.52 as of 12:11 PM ET. The Blackstone Group L.P. (NYSE:BX) shares were up 15 cents at $31.50 as of 12:11 PM ET today.