Crocs CEO says simplicity of company's clogs makes them largely immune to supply-chain issues and COVID-19 factory shutdowns

• The simple design of Crocs' clogs makes them easy to make, its CEO said Thursday.
• This, he said, made it easy to move manufacturing when factories closed over the COVID-19 pandemic.

Crocs' clogs are apparently as simple to make as they look - and it's helped the company cope during the COVID-19 pandemic.

According to the company's CEO, Andrew Rees, the world's favorite ugly shoe is made up of just three parts that can be easily assembled.

This, he said, meant the company could cope when its factories in Vietnam closed amid rising COVID-19 infection rates. It was able to easily move manufacturing elsewhere and get it up and running quickly.

"One thing that we learnt from COVID I think is really important to people to understand: Our shoes are really simple, and so ramping up factories could be very, very quick," Rees said on a call with analysts Thursday after Crocs reported another blockbuster quarter.

"You don't have a lot of external logistics to be able to get started," he added.

Crocs is among the retailers hit by factory shutdowns in Vietnam. The country's biggest cities, Hanoi and Ho Chi Minh City, fell back into lockdown in July, and while some factories were able to stay open by offering on-site accommodation for workers, many were forced to temporarily close.

This has hurt many retailers, including Nike and Lululemon, that rely on Vietnam for manufacturing.

Rees said Thursday that most of the factories Crocs worked with in Vietnam were back up and running. It had been shifting production elsewhere, however, to China, Bosnia-Herzegovina, and Indonesia, for example.

He also said Crocs was in a good position to handle global supply-chain challenges because it sold a limited number of products, an advantage that a select group of retailers have, experts say.

The company is also decreasing its reliance on clogged California ports by importing more products by air for the spring-summer 2022 season.

Crocs reported another blockbuster quarter Thursday. Sales were up 73% to $626 million, from $362 million in the same quarter in 2020, as the brand continues to capitalize on the casualization of fashion.