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Quest Means Business

Biden Heads To G7 With U.S. On Verge Of Unprecedented Default; At Least Eight Killed, Thousands Evacuated In Northern Italy; Prince Harry And Meghan Involved in "Near Catastrophic" Crash Involving Paparazzi; Crocs Become Fashion Success; Dash To The Bell. Aired 3-4p ET

Aired May 17, 2023 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:24]

RICHARD QUEST, CNN INTERNATIONAL HOST: An hour left to trade on Wall Street. If you look at the big board, we can tell the story relatively

simply. That boost came because of what the president and the speaker said about the debt ceiling. I'll tell you the details a little bit later in the

program.

So the markets are up. That really just, actually to be blunt, they are just replacing what they lost yesterday, but those are the markets and the

main events that we are following for you: Prince Harry and Meghan caught in a dangerous clash with paparazzi. The couple's security says someone

could have been killed.

President Biden says he is confident U.S. politicians will reach a deal to avoid a debt default. They are giving it away for the markets.

And love them or hate them, you can't deny, Crocs have turned colorful clogs into a booming business and the CEO will be here to tell me what's

next.

We are live in New York on Wednesday, May 17th. I'm Richard Quest and I mean business.

Good evening.

We begin tonight with Prince Harry and his wife, the Duchess of Sussex who say last night's car chase in New York could have ended in catastrophe.

Their spokesman says a swarm of photographers pursued the couple for nearly two hours following an award ceremony.

A member of their security details says the paparazzi gave chase in cars, on scooters and push bikes and that they ran red lights, jumped the curb,

and as you can see from these pictures and others, blocked sidewalks in order to keep up.

Bianca is with me, Bianca Nobilo joins me.

So judging by from what I can see behind you, it looks like Windsor Castle, but you'll correct me.

Now, what exactly happened last night.

BIANCA NOBILO, CNN INTERNATIONAL CORRESPONDENT: We are getting conflicting accounts in terms of the conclusions and you are right, I am at Windsor

Castle.

So as far as the Sussexes are concern, their spokesman has said that they will relentlessly pursued for around two hours. Paparazzi, motorcyclists,

people trying to get photos of them, so they were trying to dodge the paparazzi, throw them off. They didn't want them to find out where they

were staying.

This was the Duchess of Sussex, the Duke of Sussex and Meghan Markle's mother, Doria Ragland. They were leaving this award ceremony and according

to the Sussexes, they say that there were all of these traffic violations, it put not just the couple and Meghan's mother in jeopardy, but also the

public that there were many near misses and collisions that were only narrowly avoided.

However, we've heard a less alarmist view from sources inside the NYPD and also the taxi driver who actually drove the three of them at one point in

the evening. He said that he wouldn't characterize it as a chase and felt safe the whole time, though, the couple who said seemed quiet and scared.

The NYPD have said that they wouldn't characterize it as a near- catastrophic chase, which is how the spokesperson of the Sussexes described what unfolded last night.

QUEST: Right. But what does the NYPD -- because they were also responsible for the security of the Duke and Duchess for part of the evening. So what

are they calling it?

NOBILO: Well, they've said it was a bit chaotic and we heard from the Sussex camp that it was very chaotic. They definitely acknowledge the fact

that they were pursued for a long time; that Harry and Meghan's trip was challenging because of the amount of photographers that wanted to pursue

them and grab some snaps.

But we've also heard from Harry and Meghan's camp, and they've said that they do understand that there is a lot of public interest in this couple,

understandably, but safely should never be put at risk.

There was coordination with the NYPD at points, and there were even officers that were involved in some of the more dangerous elements of the

journey. We're still getting information from all the different sides involved -- the taxi Driver, the NYPD, as well as the Duke and Duchess of

Sussex -- Richard.

QUEST: Right. Bianca, last question, briefly. Does this give Harry -- you can do it in four words -- I told you so.

NOBILO: Well, Harry has ongoing cases at the moment against the British Home office saying that he needed to be provided security. This has long

been the campaign of both Harry and Meghan saying that they have an unusual level of threat against them, that they do require the full security.

They've long been critical of an intrusive and illegal press tactics that have been not just affecting their own lives, but that of their children as

well, not to mention what we've been hearing a lot tonight in Britain, the obvious parallels and echoes with the most traumatic events in the Duke of

Sussex's life, which is the death of his mother in a car pursuit.

[15:05:17]

So there's a lot to be sympathetic about here.

It is interesting that we haven't had any comment, the response is no comment from Buckingham Palace and Kensington Palace. And I wonder if that

will change when we get more concrete details of what actually unfolded?

QUEST: Bianca, thank you, at Windsor.

President Biden says he has had productive meetings, those are the words, with congressional leaders about raising the US government's debt ceiling.

His comments gave the market a substantial boost.

The President was preparing to leave for the G7 Summit in Japan and he said he was confident the U.S. would not default. The U.S. Treasury said the

money to pay government bills could run out by June 1st if something isn't done.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: America is not a deadbeat nation. We pay our bills. The nation has never defaulted on its debt and it

never will and we are going to continue these discussions with congressional leaders in the coming days until we reach an agreement and I

have more to say about that on Sunday, and I have a press conference on this issue.

(END VIDEO CLIP)

QUEST: Now the markets liked what they heard, avoiding a default might be a low bar, and the Dow soared on those comments, although they were fairly

obvious in a sense, he is hardly going to say that they are going to default.

The other US averages also popped with the best of the day, actually, with the NASDAQ up one-and-a-quarter percent, because Wall Street is growing

more optimistic that a deal will be reached in time.

Marc Stewart is our correspondent in Japan. He's in Hiroshima where the G7 will take place, Matt Egan is in New York, let's do somewhat counter. Let's

do Matt Egan first.

Matt, you look at what he said, the president, "I'm confident we won't default." I mean, the story would be, if he wasn't confident.

MATT EGAN, CNN REPORTER: Right, Richard.

Listen, I mean, nothing has the destructive capability quite like a default, right? I mean, it would be the easiest way to just blow up, really

the world economy.

So of course, the fact that there is a better tone in Washington over this game of chicken is encouraging news for investors.

I mean, President Biden, he did say that the recent talks have been productive, civil, respectful and he did express his confidence that

they're going to get an agreement, that America won't default. The president did talk up this idea of a Sunday press conference, which I think

has raised hopes among investors that maybe there is going to be a deal to be announced possibly on Sunday, or perhaps even a framework of an idea.

Speaker McCarthy, he didn't rule out that is possible.

But you know, Richard, to your point, though, this is really setting a very low bar here. I mean, an alternate headline on the screen could be US

markets pop as US leaders say they might not blow up the world economy.

Also, it is worth noting that really until yesterday, markets hadn't really shown almost any negative response to the debt ceiling. So, it is funny to

see markets pop on something that really wasn't actually driving them down in the first place.

QUEST: I want to take your last, but comment where you talk about the US isn't about to blow up the world, economically.

Marc, in the G7 or what will be the G7, how worried are they that this will turn into a default and it would blow up the world's economies?

MARC STEWART, CNN CORRESPONDENT: Well, I think there is certainly a global recognition that if there is a debt ceiling default, the entire world could

be in trouble and it is not just conversations that we are hearing today. I mean, just months ago, Christine Lagarde, the head of the European Central

Bank expressed reservations. Not too long ago, we heard from renowned economist, Mark Zandi warning of a financial Armageddon. So this has very

much been part of the dialogue.

It is interesting, Richard. I was looking at some of the response today to this announcement that the trip to Australia would be canceled because of

these debt ceiling concerns, and it is interesting, the Australian prime minister acknowledged that if this is not solved, there could be drastic

consequences, not just in the United States, but globally and he actually expressed some understanding.

So that's how the world views it, this American problem could quickly become a global problem.

QUEST: Staying with you, Marc now, what do we expect besides this? What's going to come out at the G7? What's the number one goal-object-desire of

this G7?

STEWART: The number one goal-objective is to have definitive stances on both the conflict in Ukraine and China. On the topic of Ukraine, the

question is will we see more economic punishment by these G7 nations?

[15:10:12]

Right now, Europe still exports items to Russia. Japan is importing energy from Russia. Will we see a tougher stance? And then also, Richard, on this

narrative about China, it will be interesting to see just how strong these G7 nations get, because as you know, many of these countries do have

economic entanglements, if you will, with China.

So do they need to be super hard, super strong against China and perhaps create some economic friction there? Or will it be a little bit tempered?

That we're going to have to see -- Richard.

QUEST: Okay, well bring it back to Matt Egan for the last word, because the markets will rule the roost, whatever. I mean, whether if you take Ukraine,

it'll be oil prices, if they go up again, it'll be sanctions on Russia. The markets' view of what they would like to see, and I freely admit Matt, they

don't really care much about G7, but they do keep a sort of a brief eye on it over there.

EGAN: Right. Well, you know, it's amazing how much has changed from the markets' perspective over the last, let's say, 14 or 15 months, because not

long ago, the war in Ukraine was causing all kinds of chaos for investors and central bankers, because of spiking energy prices.

Gasoline prices here in the United States were rocketing to record highs. Natural gas prices were skyrocketing, raising the specter of a recession in

Europe and elsewhere. And so, all of those kinds of nightmare scenarios from an economic standpoint, really have gotten a lot better.

We have energy prices that are much lower, inflation is cooling off, which obviously is very encouraging. But Richard, we know that the big risk still

remains that interest rates are high and central bankers are not in any rush to cut them anytime soon.

QUEST: Gentlemen, thank you. We will be watching events as we head towards Sunday, and thereafter with any results or any agreements.

As we continue on QUEST MEANS BUSINESS tonight, there is flooding in Italy. It is forcing thousands of people to leave their homes. We will be in Rome

for a report on that.

(COMMERCIAL BREAK)

QUEST: At least eight people have been killed in northern Italy after heavy rains triggered mudslides and flooding.

[15:15:05]

More than a dozen rivers have risen above their banks in the Emilia-Romagna region, 13,000 people have been told to evacuate the region and others are

being asked not to leave their homes.

It has been the region that has been suffering from a severe drought, already reducing its ability to absorb the torrential rain.

The disaster has caused Formula One to call off this week's Grand Prix. Dramatic video you'll see here, it shows the track under floodwater and

organizers say it wouldn't be right to put pressure on local authorities at this time.

Now, the race would have been Europe's first Formula One race of the current season. Several drivers have tweeted to say their thoughts are with

the people in the affected region.

Barbie Nadeau is in Rome for us tonight.

We're getting more and more of these, but the severity seems to be getting worse as well.

BARBIE NADEAU, CNN CONTRIBUTOR: That's right.

You know, earlier this month, there was another flood that raised the level of the River Po. Now, this is a really important river in the region. It's

for agriculture, for irrigation.

You know, it was a subject we talked about many times last year in terms of the drought there and the economic impact at that time. This flood is far

more devastating. We've got a death count. So far, eight people, they are expecting that to rise. There are several people missing, and we haven't

yet understood the economic impact.

This is an agricultural area. The River Po right now, as well is going to be a little bit higher, but it is still not enough water for this. So,

we're seeing all sorts of things we got from flood to the drought, and this infiltration of water right now by no means solve the drought problem --

Richard.

QUEST: So well, what happens next, in a sense? How many more flood prevention mechanisms can they put in place?

NADEAU: Well, they can't really do anything for flooding mechanism in this area. This area is always prone to drought. This is the problem.

So when you have a flood like this, the riverbanks have burst, the bridges have collapsed in two or three areas that has really crippled the

infrastructure in the area. The trains are stopped, the roads are stopped, and all of these sorts of things. But this is not an area prone to

flooding, and that is a big issue.

We have at the same time though in northern Italy, Venice, they've lifted the floodgates because of high water there. We've got flooding in Sicily.

You know, Italy is not -- is very, very much used to the climate that it has. It has very much use of the seasons that they have. This is not a

flood season. It's a very cold May. You know, they're supposed to be planting their crops right now. Their crops were washed out.

We won't see the economic impact of this flood for quite some time, but right now, everyone is concentrated on the human impact. You know, we've

got eight people dead so far. We don't know how many missing -- Richard.

QUEST: Barbie Nadeau in Rome. Thank you.

We've taken what's happening in Italy as a good example of the worsening situation for climate control, because a new report says the Earth could

breach a major threshold by 2027. That's earlier than previously thought.

The World Meteorological Organization says it is now more likely than not that average temperatures will rise one-and-a-half degrees Celsius from

pre-industrial levels.

What does that mean in real life? Bill Weir we asked for the gist.

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: Richard, the top line numbers here are quite arresting, a 98 percent chance that the next five years will

be the warmest five years ever recorded. This according to the World Meteorological Organization, and a 66 percent chance that we will hit 1.5

degrees warming over pre-industrial levels.

That of course, was the threshold that the Paris Accord was meant to avoid. Whether or not overshoot as the damage that science worries about, about

going over 1.5 and then somehow pulling it back remains to be seen.

Part of the calculation now is the El Nino. This is the natural warming weather patterns that happen in the waters of the Pacific now, so much of

the record warmth. When Western Canada was hotter than Las Vegas a couple of summers ago, that happened during a La Nina, a cooling period as well.

So they are saying brace for even hotter times ahead, but there is still time, especially by controlling methane, which has a much more potent

warming capacity than CO2 in the near term, by controlling methane, that's the fastest maybe the most efficient way to turn down this rocketing global

thermostat -- Richard.

QUEST: Bill Weir with the gist.

Automakers in Europe are warning about the impact of Brexit on their production. Stellantis, that's the owner of the car brands Peugeot, Citroen

and Opel says it may need to close factories in the UK if Britain's current deal with the EU is not renegotiated.

It says because of the current deal, there are major tariffs when sending electric vans to the market in the EU.

Ford says the current deal would delay the transition to electric vehicles and it's calling for a new Brexit-driven requirement to delay until 2027.

Martin Sander is the general manager of Ford Europe. He is with me now.

[15:20:12]

Martin, what is the problem? What? Why? What needs changing?

MARTIN SANDER, GENERAL MANAGER, FORD EUROPE: So, Richard, good evening here from Copenhagen. Thank you very much for having me.

First of all, let me say we are investing a lot of money, $2 billion, are going into a new plant in Cologne in Germany, at the moment where we are

building exclusively electric vehicles. We are fully committed to turning our whole product lineup into electric vehicles by 2030. And of course, we

would like to sell our electric vehicles everywhere, also in the UK, but because of the Brexit deal, we would have to pay tariffs for our vehicles

we are shipping from Europe to the UK, which of course means prices in the UK for electric vehicles go up.

QUEST: Getting to the bottom --

SANDER: Demand goes up.

QUEST: I could just jump in here, getting to the bottom of the reason why. This is all about the 45 percent rule, isn't it, from the both sides and

actually, the batteries and other components that are non-EU-UK would force it into a tariff-driven environment.

SANDER: So the situation is that this tariff applies to electric vehicles, it does of course not apply to vehicles with internal combustion engine. So

on the one hand, the UK is committed to increasing the share of electric vehicles dramatically, but the import of vehicles with combustion engine,

which would be much more favorable in comparison with electric vehicles, and of course, this absolutely does not have the ambition of the government

and also what customers want, because we know that electric vehicles are the better cars, and there is high demand for affordable electric vehicles

also in the UK.

QUEST: So I'm assuming you and all the major car makers are lobbying as hard as you can amongst many other people. Are you confident that a post-

Brexit deal will be done to put this right?

SANDER: We are confident that that there will be a deal because simply this is what is the better solution for the consumers. We know consumers want

electric vehicles, they want affordable electric vehicles and the current regulation does not really support expectation and demand from consumers

predominantly in the UK, and this is why we are confident that things will be put right by the end of the year.

QUEST: And that the transition to electric will continue at the pace necessary because as our previous gist said, we are in danger of seriously

now not making the one-and-a-half degrees.

SANDER: That is correct, and that is why all automakers are putting a lot of money in electrifying their fleet. We are 100 percent committed by 2030,

already, each and every passenger vehicle in the Ford showroom in Europe will be an electric vehicle and the good thing is, electric vehicles are

just the better cars -- instant acceleration, smooth ride, much more space because the electric drive train is smaller than the internal combustion

engine drive train.

So there will be very, very strong demand and this is why I'm confident that we can do our part to bring CO2 emission down quite quickly.

QUEST: Martin, I'm glad you joined us tonight. Thank you for putting it into perspective for us.

SANDER: Thank you.

QUEST: Headquartered in Durban in South Africa, Aspen Pharmacare has a strong presence across the continent.

For this month's "Connecting Africa," Eleni Giokos spoke to Aspen's chief executive, Stephen Saad, and began by asking him the impact that COVID

pandemic had on the pharmaceutical industry.

(BEGIN VIDEO TAPE)

STEPHEN SAAD, CHIEF EXECUTIVE, ASPEN PHARMACARE: I think the pandemic really spooked the world, and certainly we were really proud to be able to

deliver a vaccine to the continent in the quantities that we did.

But the reality of COVID was that, you know, Africa didn't get vaccinated and we've done a few pandemics, whether it was AIDS or multi-drug resistant

TB, we have to be strong regionally. Instead of saying, look, we've lost the COVID vaccine volumes and so we're closing up, we've actually put even

more capacity in, and that is really to be able to provide cover for the continent in total.

We committed to one person, one vaccine in Africa and we are working very hard towards that process and so a lot of machinery coming in, a big

capacity ramp up.

ELENI GIOKOS, CNN INTERNATIONAL CORRESPONDENT AND HOST: If I had to ask you to define and describe what the pharmaceutical sector right now looks like

in Africa, a continent that is disproportionately affected by disease compared to other regions in the world, what would your answer be?

[15:25:11]

SAAD: I think the answer is this simple. You know, when COVID came and Africa needed vaccines, what we found out was that over 90-odd percent of

the vaccines were supplied out of India. At the end of the day, you can't ask politicians or other countries to supply someone else before them. I

don't think anybody wants Africans to suffer, but the reality and we saw it, whether it was Europeans or India, the borders closed and they looked

after their own population first.

So the bottom line is, Africa really didn't have an industry. If it hadn't been for Aspen, there would have been no vaccines made in Africa for the

continent.

GIOKOS: The African Union has a target to achieve at least a 30 percent off take of all vaccines from African manufacturers. It has taken you a few

decades to get to where you are. How quickly, can we get manufacturing hubs operational with good manufacturing practices, you know, meeting regulatory

environments in other parts of Africa?

SAAD: We can easily get to 30 percent. Aspen could do that alone across Africa quite easily. We want to build capacity for one person and one

vaccine across Africa and that is what we're doing. So I think we can do it.

You also don't want this vested in one country or one company, specifically. You can go and deliver this across Africa and you can be an

exporter, but I think if you want to do something, you can get yourself in the forefront of trying to assist humanity when needed.

GIOKOS: If I say to you, what is the next most exciting market for you right now in Africa for you to produce products and to manufacture, where

would that be?

SAAD: We have a big presence in East Africa, soi that's an area that you know, you try and build on your strengths, but it is really important to be

strong in West Africa, where there's a lot of people. At the end of the day, we are a consumer business.

Having access into West Africa is important and servicing those people who are underserved is a real opportunity. To do that, we've really got to

build up the GDPs across our continent, but you need healthy people for that.

(END VIDEO TAPE)

QUEST: This is one of the most polarizing shoes in fashion. And no, these aren't mine. I am a size 10, I wouldn't get into them. It's Crocs and for

fans and critics alike, I will have the Croc CEO, next.

(COMMERCIAL BREAK)

[15:30:00]

QUEST: Returning to our lead story, the paparazzi pursuit last night of Prince Harry and Meghan, in New York City. The mayor, Eric Adams, has

called the incident reckless and irresponsible.

A spokesman for Prince Harry said the chase lasted two hours. The mayor said he found that timeframe hard to believe. And that his office has tried

to find out just what happened. Jason Carroll is our correspondent in New York and finding out what happened, too.

The gist of it here seems to be the general public was at risk. But the NYPD were responsible for security, at least the immediate security, of the

Duke and Duchess of Sussex.

So what were they able to do?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, you're right. There was an NYPD protective team assigned to the duke and to the duchess. The way that

we're hearing it, though, there was such a swarm of paparazzi as they left that event at the Ziegfeld Theater -- and just to give you the lay of the

land, we are here at the 19th Precinct.

This is just located about a mile or so from the theater, where this event last night took place.

Apparently, Richard, when it was over, there was such a swarm of paparazzi, according to the duke and duchess' spokesperson, these people were on

motorcycles and scooters and driving up on the sidewalks as this motorcade was trying to get through and get to a second location.

And at that point, when they were going through red lights, going on the sidewalks, they were putting pedestrians at risk. At one point, the

protective team tried to do some sort of evasive maneuver; that didn't work.

So what they did was, they came here to the 19th precinct, which is a police station, and took refuge here while they sorted out what their next

move was going to be until the situation sort of calmed things down.

Now they say the whole ordeal took about two hours. New York City's mayor weighed in on that, questioning the timing but still going after the

paparazzi.

(BEGIN VIDEO CLIP)

MAYOR ERIC ADAMS (D-NY), NEW YORK CITY: The briefing I received, you know, two of our officers could've been injured. New York City is different from

a small town somewhere.

You shouldn't be speeding anywhere. This is a densely populated city. And I think all of us, I don't think there's many of us, who don't recall how his

mom died.

And it would be horrific to lose innocent bystanders during a chase like this and something to have happened to them as well. So I think we have to

be extremely responsible. I thought that was a bit reckless and irresponsible.

(END VIDEO CLIP)

CARROLL: Now in terms of that two hours, I think there's some sort of thought that some of that time in that two hours was probably spent here at

the precinct, hiding out. But these are some of the details that are still yet to be worked out.

QUEST: Jason, the answer here, surely, is how the police now deal with those who broke the law because that is going to be the way in which you

prevent this from happening in the future.

CARROLL: Perhaps. I mean, I think what's going to happen is, police are going to be going through all sorts of security tape. They'll be looking at

red light cameras to see if they can find anything from that point of view as well.

But as you, know this is a city that is used to celebrities, used to paparazzi, used to very large crowds, used to traffic. You can hear some of

it now.

So I think, when it comes to going after some of these people, giving some sort of a summons here or there, is that going to stop paparazzi in New

York City as aggressive as they are from going after celebrities?

I think that's still an outstanding question.

QUEST: Jason Carroll, who's in New York, thank you.

Now this is one of those fashion statements. You either love them or you hate them, it seems to be the way. They are the Marmite, if you will, of

shoewear. And yet, Crocs are a footwear phenomenon. Now as I said earlier, these are a bit small for me.

[15:35:00]

QUEST: The brand has been adopted by Gen Z and trendsetters alike. Its prominence solidified by partnerships with the likes of Balenciaga, Justin

Bieber and "Vogue." And the 20-year-old brand really got turbocharged during the pandemic.

The shares were up more than 400 percent since March 2020. Its fashion- forward strategy is paying off and the stock price heads back toward pandemic highs. Andrew Rees is the CEO of Crocs, he joins me from Boston.

I have to make this confession, which is not an invitation for you to send me any but I haven't worn Crocs. I think that, I just put that out there at

the moment. Your ability to claw back the pandemic boost is impressive.

ANDREW REES, CEO, CROCS: (INAUDIBLE).

QUEST: Andrew, can you hear me?

(CROSSTALK)

REES: -- hear me. We lost you.

I can hear you, now. Sorry, we lost you --

QUEST: Yes, I was just saying, your ability to claw back pandemic boosts has been very successful. Many companies have not.

REES: Yes. Yes, yes, no, look, I think the benefit that we have, Richard, is we were on a strong growth trajectory before we entered the pandemic. We

did absolutely benefit from the pandemic.

People were at home and, in my view, it accelerated that casualization trend we've seen for some time. And so we've benefited from that

casualization trend. I think we did some incredible marketing and appeal to our consumers in innovative ways during the pandemic.

But we've continued that post pandemic. And we're seeing very strong growth in the Crocs brand, as you highlighted. I'm disappointed that we haven't

yet gotten you into them, Richard. But we have many, many people. So we can keep working on that.

QUEST: What do you think is the reason, in your view, for the success?

They're quirky, they're cute.

But what's the reason?

REES: It's -- look, there's a long run consumer trend that we're following, which is casualization, comfort, easy on and off and value. The consumer is

not focused on buying high-priced, uncomfortable, you know, fashion- centric, potentially leather, long-lasting footwear anymore.

They are focused on a little bit more disposable, value oriented, very high comfort, right for me today, maybe not right for me tomorrow but that

doesn't matter. But I will buy something else. So that is what we are appealing to.

(CROSSTALK)

QUEST: You need to have something for that day, when they say, I'll buy something tomorrow.

REES: Absolutely. So that's why constant innovation -- we're bringing out new styles, new colors, new prints, new collaborations at an incredible

rate. So this year, we'll do in excess of 60 license/collaboration events, with different companies, celebrities, musicians, brands, et cetera, to

appeal to very different audiences.

So that pace of innovation is super important.

QUEST: Are you or do you believe you've reached the position of safety?

You're no longer a fad; you can't go backwards.

REES: Look, I think that's a really important question, Richard. I think -- and at our company, we really believe that scale is important. So this

year, the Crocs brand -- and don't forget, we own another brand as well, which we should also make sure we talk about -- the Crocs brand will be a

little bit shy of $3 billion in annual sales.

That is a scale global footwear brand. And what scale gives you, it gives you a large innovation edge. You can afford to innovate, you can afford to

try new things, you can afford to create new materials. It gives you a large marketing budget, so you can constantly engage with new consumers.

And it gives you a strong share of shelf with your wholesale partners. So if we're selling a famous footwear, if you are a small player and you make

a mistake, well, the opposite thing is they'll disbelieve (ph) you. There's no reason to work with you to rectify it.

(CROSSTALK)

QUEST: Do you need to add more to the famous -- to add more brands within it, to solidify that position?

Or are you comfortable with what you've got now?

REES: We need to do both. We need to, one, build out the brands that we have. We're not focused on buying additional brands at this point in time.

We think the Crocs brand and the HEYDUDE brand, which is our recent acquisition -- we've got on that for a little over a year -- have a lot of

growth trajectory.

But at the same time, they're going to generate lots of, profit lots of cash flow and we'll have choices in the future as to what we do with that.

Our short term, plan is to return to pay down debt and return that to shareholders.

But longer term, maybe three or four years, out we've got other alternatives in play.

QUEST: OK. So the final thought here, because an anecdotal -- some love, you some hate you.

[15:40:00]

QUEST: The Marmite of shoes is how it's been described. I don't know whether that's a comfortable position to be in or a highly uncomfortable

one.

REES: So we have a very clear point of view on that, Richard. Maybe not everybody's going to agree with me. But from a consumer perspective and a

marketing perspective, that is a great place to be.

Because that tension between the lovers and haters allows us to do lots of creative things and create very significant amounts of free media. From an

investor point of view, I don't think it's quite as appealing.

We do also hear that from investors. Some people understand the business and are right on board. Others just reject it outright and don't spend the

time to look at the underlying financials of the company, which are incredibly compelling.

QUEST: Andrew, thank you. I promise, by the next time we speak, I will have at least wore them, I'm grateful for you, sir.

And no --

(CROSSTALK)

QUEST: -- I don't want every color sent to me in the next week. Thank you, sir.

And that's QUEST MEANS BUSINESS, I'll have the dash to the closing bell. It's going to be a good one, the market's up. Coming up next, MARKETPLACE

ASIA.

(COMMERCIAL BREAK)

(MARKETPLACE ASIA)

(COMMERCIAL BREAK)

[15:58:45]

QUEST: Hello, I'm Richard Quest. We have a dash to the closing bell. It's just 90 seconds or so before it rings.

Joe Biden says the U.S. is not going to default and the markets liked it. The Dow opened higher and really picked up steam after the president's

commentary. You can follow the track.

The S&P and the Nasdaq are posting similar gains. A bullish day for Wall Street and a bullish year for Crocs. Its share price has more than doubled

over the last 12 months. And the CEO, Andrew Rees, says Crocs are the right shoe for the times.

(BEGIN VIDEO CLIP)

REES: There is a long run consumer trend that we are following, which is casualization, comfort, easy on and off and value. The consumer is not

focused on buying high-priced, uncomfortable, you know, fashion-centric, potentially leather, long-lasting footwear anymore.

They are focused on a little bit more disposable, value oriented, very high comfort, right for me today, maybe not right for me tomorrow but that

doesn't matter. But I will buy something else. So that is what we are appealing to.

(END VIDEO CLIP)

QUEST: Now looking at the Dow components, most stocks have gained, some quite significantly. Home Depot is enjoying a round -- a strong rebound

after Tuesday's early miss but it got its sales up.

Strong day for Boeing as well. It's at the top of the chart. And that is the dash to the closing bell. I am Richard Quest. Whatever you're up to in

the hours ahead, I hope it is profitable. The closing bell is ringing.

END