John McCarvel the CEO of Crocs, Inc will retire and an investment of $200 million will be made by Blackstone Group LP in the form of convertible preferred stock as the colorful plastic clog maker struggles in its attempt to regain its lost popularity.
The plastic shoemaker will utilize the funds to make more stock repurchases to $350 million, said the company based in Niwot, Colorado in a prepared statement.
McCarvel is scheduled to step down sometime before the end of April of 2014.
Crocs has attempted to revive its good fortunes after shoppers tired of the trademark clogs, knockoffs hurt its sales and spending by the U.S. consumer dropped.
The Blackstone investment comes following an attempt by Crocs to find a buyer for the entire company, said people who are familiar with the company back in November.
Starting the first quarter of next year, the company will begin to repurchase stock, as it has not been able to while trying to negotiate this investment transaction, said Jeff Lasher the company CFO in a statement.
The repurchased stock will reduce the amount of common stock that is publicly traded by over 30% said the CFO.
In early trading in Germany on Monday, Crocs was up over 2.6% to $13.68.
McCarvel, who took over the helm of Crocs in March of 2010, expanded the products offered by the company to include different styles of footwear as well as opening new stores. Shares in the company have fallen by 7.4% during 2013 in New York, compared with a gain of 29% in the S&P 500 index.
The board of directors at Crocs has started a search for a replacement for McCarvel according to a company statement.
Blackstone’s preferred shares stake will have a cash dividend rate of 6% and can be convertible to common stock at a share price of $14.50, said a Crocs statement.
Crocs has announced it expects revenue for the fourth quarter to be at its low end of its guidance range of between $220 million and $225 million.
Its diluted loss per share is expected to be at the higher of the 20 cents to 23 cents projected range. That compares to an analysts’ average of a loss of 19 cents.
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