00:00 Today on Forbes, how the Hey Dude guy became a billionaire selling ugly shoes.
00:09 Two years ago, Brown's shoe fit company's desperation to stock enough Hey Dude shoes
00:13 to meet the demand reached frenzied levels.
00:17 The buyers for the 73-store Midwestern chain would get a status report in the morning and
00:22 try to place a large order.
00:25 Adam Smith, senior manager for Brown's and a former store manager in Jacksonville, Illinois,
00:30 says "We would get one-fourth or one-half of what we put in for.
00:35 The whole nation was trying to get them."
00:39 Hey Dude founder Alessandro Rosano, an Italian entrepreneur living in Hong Kong, had tried
00:44 his hand at other businesses before.
00:46 But with Hey Dude, which makes comfortable slip-on loafers with the so-called "so ugly
00:51 they're cute" look, he hit the jackpot.
00:55 With minimal investment and almost no marketing, revenue took off, reaching $581 million in
01:01 2021, with a net profit of $175 million.
01:06 That December, Rosano agreed to sell the brand to Crocs, the $6.2 billion market cap firm
01:13 whose own ugly-cute rubber clogs are a worldwide phenomenon.
01:17 The deal was for $2.5 billion in cash and stock.
01:22 With it, Rosano became a billionaire, worth $1.4 billion by Forbes estimates.
01:28 His business partner and American distributor Daniele Guidi also made a fortune, worth some
01:33 $650 million after tax by Forbes estimates, after bringing in $787 million in cash from
01:40 the deal, according to regulatory filings with the Securities and Exchange Commission.
01:45 Rosano declined to speak with Forbes, and Guidi didn't respond to requests for comment.
01:50 But what the two men were able to build, largely under the radar, is an unlikely success.
01:55 It stands in stark contrast to many of the direct-to-consumer brands that received lavish
02:00 amounts of funding and attention from social media during the boom years, while failing
02:04 to become viable businesses.
02:07 Comfort shoemaker Allbirds, once the darling of Silicon Valley, for example, has seen its
02:11 market cap collapse from a peak of more than $4 billion after its 2021 initial public offering
02:17 to just $199 million today as annual sales failed to top $300 million and losses piled
02:25 up.
02:26 Now, Rosano, a strategic advisor to the brand under Crocs following the acquisition, has
02:32 set up a family office to invest his money and work on philanthropy.
02:36 Crocs is using the brand, which reached $1.1 billion in sales in the latest 12-month period,
02:41 to add spice to its broader business.
02:44 Comfort shoes are having a moment.
02:46 Crocs, with total sales of $3.6 billion in 2022, has said it hopes to reach $5 billion
02:52 in sales for its flagship brand by 2026.
02:56 A. Dude looks poised to help the company soar past that.
03:00 In 2022, A. Dude was the single fastest-growing brand at retail, according to consumer research
03:06 firm Sarkana, which was formerly known as MPD.
03:10 Crocs CEO Andrew Ries tells Forbes, "When we first bought it, we wanted to be clear
03:16 to people that this was a scale business.
03:18 They hadn't heard of it and didn't know what it was.
03:21 We put out the $1 billion target, which we knew we could blow past, and we've gotten
03:25 to that easily."
03:28 Speaking about Rosano, who started designing shoes at age 18 and is now in his mid-50s,
03:33 the Crocs CEO says that he "is a student.
03:36 He's a serial entrepreneur.
03:38 He had a number of entrepreneurial businesses before this that had not been successful.
03:42 He was looking to improve his chances of success, and he admired Crocs' focus on simplicity
03:47 and comfort."
03:49 Rosano founded A. Dude in 2008.
03:52 In a 2020 interview with Photo Shoe magazine, an Italian industry publication, Rosano's
03:57 sister, Elena DiMartini, who was then CEO of Fratelli Diversi, described how Rosano
04:02 returned from a trip to China and realized that a modern shoe that was as comfortable
04:06 as a slipper didn't exist, and decided to create one.
04:11 For full coverage, check out Amy Feldman's piece on Forbes.com.
04:17 This is Kieran Meadows from Forbes.
04:19 Thanks for tuning in.
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