He said the deal is expected to close in the first quarter of next year, and Hey Dude will operate as a separate division that will immediately increase revenue and profits.
Yet Crocs' shares fell 12 percent on Thursday on the news, its worst performance since April 2020.
Like Crocs, Hey Dude is a comfort-focused footwear brand, and Andrew Rees said in a statement, "We are excited to add a high-growth, high-margin brand to our portfolio. We believe that Hey Dude's casual, comfortable and lightweight offerings are in line with long-term consumer trends and are a perfect match for Crocs."
Crocs said Hey Dude, which generates more than 40 percent of its business online, is expected to bring in approximately $570 million in revenue this year, and Rees expects sales in 2022 to be between $700 million and $750 million.
Hey Dude was founded in Italy in 2008 and focused on making lightweight shoes, such as slippers for men, women, and children, that sell for roughly $60, according to its official website.
"We see a lot of potential for Hey Dude in the U.S. and globally," Rees said confidently, "The brand has diversity and was one of the key reasons we acquired it."
U.S. investment bank Piper Sandler said Hey Dude is one of the fastest-growing brands the firm tracks, and that the drop in Crocs' stock price is inconsistent with the acquisition news. The firm said, "We believe that investors are concerned because they are unfamiliar with the brand, are concerned about the sustainability of growth, and that management has not reiterated performance guidance."
