Crocs says Costco not authorized to sell its shoes

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The company said it discovered instances where it believes its shoes were being sold indirectly to the warehouse club operator and terminated relationships with those it believes responsible.

NEW YORK (Reuters) - Crocs Inc <CROX.O>, known for its colorful, plastic shoes, said on Thursday that it does not sell its shoes at Costco Wholesale Corp <COST.O> stores and has no plans to do so.

The company said it discovered instances where it believes its shoes were being sold indirectly to the warehouse club operator and terminated relationships with those it believes responsible.

Customers pay an annual membership fee to shop at Costco's clubs, which sell everything from discounted televisions and jewelry to bulk-sized packages of toilet paper and soda.

Crocs, which has authorized full-priced sellers such as Dick's Sporting Goods Inc <DKS.N>, Modell's Sporting Goods and Genesco Inc's <GCO.N> Journeys chain, said its distribution strategy is meant to "maintain price integrity and enhance brand equity."

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"I want to reiterate that Costco is not an authorized dealer of Crocs products," said Crocs Chief Executive Ron Snyder.

A Costco representative declined to comment.

Crocs shares, which had been down 7 percent earlier in the session, rallied on the news, and were down only 34 cents, or 1.7 percent, at $20.12 on the Nasdaq afterward.

(Reporting by Martinne Geller, editing by Leslie Gevirtz and Gerald E. McCormick)