Shares in shoe company Crocs (NASDAQ: CROX) are up over 300% this year. At $59, they trade near their all-time high. The company makes footwear products that have become wildly popular. Revenue moved from $109 million in 2005 to $355 million last year.
Shoes aren't enough, though. Crocs is about to launch a line of men's and children's clothing, according to The Wall Street Journal. Wall Street has become concerned that the shoe business can only grow so far, and the company hopes to respond.
The new clothing lines will combine standard fibers like cotton "with a lightweight derivative of the pliable, plastic resin used to make Crocs' shoes, " the Journal writes.
The move may be a risk, since clothing has not been a significant part of the company's business, yet it is a smart move. The company's annual revenue run-rate is about $1 billion and if it stayed only in the shoe business it is unlikely it could continue to triple its sales every year.
Funky shoes can't be a growth business forever.
