How The HeyDude Guy Became A Billionaire Selling Ugly Shoes

Forbes

Two years ago, Brown’s Shoe Fit Co.’s desperation to stock enough HeyDude shoes to meet the demand reached frenzied levels. The buyers for the 73-store Midwestern chain would get a status report in the morning and try to place a large order. “We would get one-fourth or one-half of what we put in for,” says Adam Smith, senior manager for Brown’s and a former store manager in Jacksonville, Illinois. “The whole nation was trying to get them.”  HeyDude founder Alessandro Rosano, an Italian entrepreneur living in Hong Kong, had tried his hand at other businesses before. But with HeyDude, which makes comfortable slip-on loafers with a so-ugly-they’re-cute look, he hit the jackpot. With minimal investment and almost no marketing, revenue took off, reaching $581 million in 2021, with net profit of $175 million. That December, Rosano agreed to sell the brand to Crocs, the $6.2 billion (market cap) firm whose own ugly-cute rubber clogs are a worldwide phenomenon, for $2.5 billion in cash and stock.  Read the full story on Forbes: https://www.forbes.com/sites/amyfeldman/2023/09/05/how-the-heydude-guy-became-a-billionaire-selling-ugly-shoes/?sh=55b777522fbf  Forbes Daily Briefing shares the best of Forbes reporting on wealth, business, entrepreneurship, leadership and more. Tune in every day, seven days a week, to hear a new story. Subscribe here: https://art19.com/shows/forbes-daily-briefing Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

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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