Photo of Joe Fonseca, Crocs and Thomas Murphy, Bank of America.
Joe Fonseca
VP, Global Treasurer
Crocs Inc (Crocs) designs, manufactures, markets and distributes footwear and accessories for men, women and children. It is present in the North Americas, Asia Pacific and Europe, and is headquartered in Broomfield, Colorado, USA.
in partnership with
The challenge
Crocs – the shoes famed for their comfort and practicality rather than aesthetic – feel like they’ve walked the earth for years, but the company was only established in 2002. Following two decades of growth, Crocs needed to invest in its treasury function to reduce costs and increase efficiency. A key area of focus was the company’s banking structure and treasury wanted to restructure its bank relationships to better support its borrowing needs and liquidity management.
The solution
Crocs partnered with Bank of America, Citibank, HSBC and PNC to set up an in-house bank (IHB). The process involved detailed analysis across the company’s tax, legal and finance teams; working with banking partners and external treasury consultants.
Crocs completed important steps towards establishing an IHB for example, naming a key European location as the IHB entity. Getting the most out of the new legal entity also called for a new treasury management system (TMS). Crocs mandated provider GTreasury and together with its banks integrated the new platform with its accounts, including feeding Swift MT940 messages and treasury payments through the new system as well as SAP connectivity with Croc’s bank group.
In another innovation, the team implemented a cash flow hedging programme to complement an existing balance sheet hedging strategy. Crocs sells its product in more than 85 countries, which makes FX risk management a priority. Understanding global FX exposures and finding mechanisms to mitigate risk through different hedging strategies was an important goal and one that is now tightly managed.
Added challenges included integrating Hey Dude when Crocs bought the footwear brand in 2022. The team had to carry out a complex integration whilst managing ‘business-as-usual’ in a high growth environment. The treasury transformation project also included building out the team in the US, EMEA and APAC.
Best practice and innovation
Crocs treasury team completed the transformation in 18 months alongside meeting demands placed on treasury by rapid growth. Sales of Crocs and Hey Dude brands grew to ~US$4bn, equal to 11.5% growth vs prior year (2022).
Crocs Treasury has a hands-on, inclusive approach. The HQ team are frequently present in the regions, and treasury culture is shaped around collaboration with the team, banks and technology providers. Because relationship management is central, Crocs many counterparties have been able to support the company’s new vision for treasury.
Key benefits
Cost savings.
Process efficiencies.
Return on investment (ROI).
Increased automation.
Risk mitigated.
Improved visibility.
Errors reduced.
Number of banking partners/bank accounts reduced.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
This project shows how a committed, expert team led by a seasoned treasurer can completely transform a global treasury operation. Under the leadership of VP and Global Treasurer Joe Fonseca, the small treasury team (just six members, including the treasurer) has consolidated numerous entities and bank accounts in multiple regions; introduced a TMS; embarked on a journey to utilise a global ERP instance; consolidated billing platforms and established an IHB.
Crocs continue to drive innovation within their treasury processes, structures and technology solutions with the goal of optimising efficiency across the globe. With the company’s ongoing rapid growth, the implementation of their Treasury Management System, appointment of an in-house bank and decision to partner with strategic banking providers to realise their goals, the company should truly celebrate their achievements which have been recognised by Treasury Today. As the journey continues, Bank of America remains committed to Crocs’ treasury needs.
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The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 389 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
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Crocs treasury team completed the transformation in 18 months alongside meeting demands placed on treasury by rapid growth. Sales of Crocs and Hey Dude brands grew to ~US$4bn, equal to 11.5% growth vs prior year (2022).
