Niwot, CO–Crcos Inc. hope to get a boost in its turnaround plans thanks to a $200 million investment into the footwear brand in the form of a preferred stock investment by private equity firm Blackstone Group LP.
According to Jeff Lasher, chief financial officer at Crocs, the deal provides Blackstone with a 13% stake in Crocs and two seats on its board. The preferred shares can convert to common stock in three years if the company’s shares rise to a certain level.
Crocs plans to use the investment along with existing cash for a $350 million stock repurchase that is expected to begin in the first quarter. Lasher said such a transaction would reduce outstanding shares in Crocs by some 30%.
In other news, CEO John McCarvel plan to retire in April 2014. McCarvel, who has led Crocs since 2010, will give up his board seat, too. The board has begun a search for his successor, Lasher said.
Blackstone reportedly is pushing Crocs to close some of its U.S. stores and continue expanding in Asia.
Crocs, which had been considering selling to private equity firm last summer, reported its third-quarter profit plunged 71% to $13 million on revenue of $288.5 million.