The simplicity of Crocs clogs makes them largely immune to supply chain issues and Covid plant closures
- The simple design of Crocs’ iconic clogs means they’re easy to make, says its CEO.
- This meant it was easy to move manufacturing elsewhere when factories closed during the pandemic.
- The company reported hit earnings this week as casual wear continues to prevail.
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Crocs clogs are as simple to make as they look – and this has helped the company deal with the Covid-19 pandemic.
According to the CEO of the company, the world’s favorite ugly shoe consists of just three parts that can be easily put together.
This meant the company could cope with the closure of its factories in Vietnam due to rising rates of Covid-19 infection. It was able to easily move manufacturing elsewhere and get it up and running quickly, said Andrew Rees, CEO of Crocs.
“One thing we learned from Covid, I think, is really important for people to understand, our shoes are really simple and so the factories ramp up could be very, very quick,” Rees said during a call with analysts Thursday, after Crocs reported another blockbuster neighborhood.
“You don’t have a lot of external logistics to be able to get started,” he added.
Crocs is among the retailers affected by plant closures in Vietnam. The country’s largest cities, Hanoi and Ho Chi Minh City, went into lockdown in July, and while some factories have been able to stay open by providing on-site accommodation for workers, many have been forced to close temporarily.
This has hurt many retailers, including Nike and Lululemon, which depend on Vietnam for manufacturing.
Rees said Thursday that most of the factories she works with in Vietnam were back up and running. However, it had moved production elsewhere to China, Bosnia and Indonesia, for example.
He also said Crocs is well positioned to meet the challenges of the global supply chain as it sells a limited number of products, an advantage enjoyed by a select group of retailers, experts say.
The company is also decreasing its reliance on clogged California ports by importing more air cargo products for the spring-summer 2022 season.
Crocs announced another successful quarter on Thursday. Sales rose 73% to $ 626 million from $ 362 million in 2020 as the brand continues to capitalize on the precariousness of fashion.