Crocs to receive $200 million from Blackstone, CEO to retire

Sun Dec 29, 2013 10:45pm EST
 
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NEW YORK (Reuters) - Crocs Inc CROX.O said Blackstone Group LP (BX.N: Quote) is making a $200 million investment that will give the private equity firm a 13 percent stake in the shoe company.

In exchange for the $200 million, Blackstone will receive preferred stock that can convert to common stock in three years if certain conditions are met. It will also receive two board seats.

The preferred stock will have a 6 percent cash dividend rate and is convertible into shares of common stock at a conversion price of $14.50 per share.

The shoemaker also said late on Sunday that the company's chief executive, John McCarvel, plans to retire in April and will also give up his seat on Crocs' board.

"We will recruit a new CEO 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," Chairman Thomas Smach said in a statement.

Crocs, which is known for its colorful clogs, intends to use the Blackstone investment to help pay for a $350 million stock repurchase it expects to launch in the first quarter.

Established in 2002, Crocs sells its shoes, made out of a proprietary closed-cell resin it calls Croslite and which are offered in more than 300 four-season footwear styles in some 125 countries, according to its website.

Crocs posted a 2 percent decline in sales for the third quarter, hurt by weakness in the Americas and Japan. The company said it saw less discretionary spending for footwear, apparel and other consumer goods in the United States.

The company now expects fourth-quarter revenue to be at the low end of the previously provided outlook range of $220 million and $225 million, while it expects loss per share to be near 23 cents.   Continued...

 
Crocs Chief Financial Officer Jeff Lasher speaks at the Reuters Consumer and Retail Summit in New York September 11, 2012. REUTERS/Lee Celano