US-based footwear maker Crocs Inc. is shutting company-owned manufacturing plants in order to streamline operations, a media report said.
The American firm that sells plastic clogs has also decided to boost investment in India as the demand for its products is on the rise. "For us, given the scale of the business, we don't see it (local manufacturing) as economically viable yet," Crocs global CFO & EVP Carrie Teffner was quoted as saying by The Times of India.
Crocs sees India as one of the growth drivers in the Asian market. "A few years ago, India was not among the top five markets given the size at that time but, given the growth trajectory it is on, it has the opportunity to grow into one of our top-tier markets," Teffner told the newspaper.
At present, Crocs' product offering includes flats, loafers, sneakers, flip-flops, and its signature clogs.
The company is following a similar business strategy in Europe and in Latin America. Earlier this month, the footwear firm decided to close company-owned manufacturing units in Italy and Mexico, by the year's end.
The company also announced the outsourcing of additional manufacturing and the closure of a distribution facility in Mexico. That apart, Crocs is closing less productive retail stores as leases expire, to focus more on online sales.
In March 2017, before the roll out of the Goods and Services Tax (GST), Crocs said it would look at manufacturing its products locally if the tax regime favoured the footwear sector.
"We do have business plans in place based on certain assumptions on GST (rates). If it is favourable, we are going to plan manufacturing products in India. We will take the decision in 6-8 months," Crocs India Managing Director Deepak Chhabra had said.
He further said: "At present, there are no incentives for manufacturing locally. VAT rates for footwear are much higher than apparel. Unless there is benefit of making in India, there is no point in doing it."
With inputs from PTI
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Updated Date: Aug 23, 2018 19:14:53 IST