New York, NY, United States (4E) – Blackstone Group LP is investing $200mn into Crocs Inc. in the form of preferred stocks, according to the footwear company’s Chief Financial Officer Jeff Lasher.
The deal will give the private-equity firm a 13 percent ownership stake in Crocs and two seats on its board, Mr. Lasher said in an interview Sunday. The preferred shares can be converted to common stock in three years if the company’s stock price increases to a certain level, Mr. Lasher added.
Crocs said it plans to use the funds infused by Blackstone along with existing cash to repurchase stock valued at $350mn, which they plan of doing starting in the first quarter. Mr. Lasher also said that Crocs Chief Executive Officer John McCarvel plans to retire by late April.
As its most popular product — plastic clogs with holes – struggles to regain its popularity with customers, the Niwot, Colorado-based company diversified into other styles, like heels and sandals, but those lines have so far failed to gain much traction. Mr. Lasher said that around 45 percent of the company’s sales have a clog style.
This year, Crocs considered selling the entire company to private-equity firms. Blackstone wants Crocs to close some of its stores in the U.S., while expanding in Asia and offering new products, according to a person familiar of the company’s plans.