As CEO of VF Corp, a $12 billion-a-year company that owns brands like The North Face, Vans and Supreme, Steve Rendle has seen this firsthand. Over the last two years, he’s gingerly ramped up efforts to produce some goods closer to the markets where they’re sold. He’s also been closely tracking inventory to avoid a buildup of excess merchandise that might need to be discounted later, while ensuring his companies have enough goods on hand to meet unexpectedly strong demand.

“We’re still in a world of uncertainty,” the 62-year-old CEO told Fortune in an interview at his office in VF’s downtown Denver headquarters. While Rendle agrees the worst of the supply chain crisis is over, several factors could revive it, such as new COVID-19 outbreaks, port strikes, truck driver shortages, and now a potential recession that could slow demand. “Our supply chain team is working around the clock,” he says.

VF’s supply chain issues aren’t unique to the company. The snarled supply chain has led retailers like Target, Gap and Walmart to announce big markdowns for merchandise that belatedly arrived in stores or in greater quantities than demand dictated. VF has largely avoided those problems by selling a higher percentage of its wares on its site and in its own stores, and less at other retailers, notably department stores. The apparel and footwear company is also prioritizing new product innovations and marketing to help differentiate its portfolio companies from their competitors and maintain a clear brand identity for consumers.

But by Rendle’s own admission, two of VF’s star brands, Vans and Supreme, have lost some of their “heat” lately, adding to his list of challenges. Still he insists that his brands, which skew higher in price, are well equipped to weather any storm. “You are seeing an impact [of the uncertainty] in the more mass- and mid-tier retailers. But as you move up into that middle and upper income group, consumers are still spending,” says the CEO.

This interview has been edited and condensed for clarity.

Fortune: Is the supply chain crisis in the rearview mirror?

Rendle: I don’t think we can affirm that it’s in the past. When you have rolling shutdowns in countries where you have primary production for finished goods and for your raw materials, it’s an ongoing area of concern and an unbelievable amount of work. Our supply chain team is working around the clock. Last year, we spent an exceptional amount of our investment capital on air freight to really stay on track, to the best of our abilities, and it worked. We think about rolling shutdowns across Southeast Asia, the shutdown that we just experienced in China, the delays, the backups, the lack of containers, inland trucking—it’s just been a lot of issues for our teams to deal with. We’re still in a world of uncertainty with COVID. China still isn’t open and functioning at the rate of the rest of the world.

Have you considered bringing more production closer to the U.S. or other markets where you sell your wares? Is that something that’d ease future supply chain drama?

It could be helpful, but it is hard to switch where you produce. We’ve been toying for a while with the idea of having some production closer to consumption, meaning for instance, products for the China market being made in China. We’ve been able to turn new styles and deliver finished goods in less than 60 days for simple garments. We’ve been moving some production to Portugal and leveraging our supply chain team by giving them more responsibility to manage local production. We can produce footwear in Europe through production in Portugal. Eastern Europe has always been a great option, but the war in Ukraine is not helping.

What about more production in the U.S.?

For traditional apparel production in the United States, I’m not sure the American worker wants to do that [working in clothing factories] again.

How are you preparing for a potential recession?

We certainly run a lot of scenarios with this in mind. A few of us here went through the 2008 recession, but a lot of us didn’t. So we are helping leaders, not just at the highest level, but throughout our company to understand what a recession would mean and that it’s not the end of the world. That means maintaining a positive outlook and focusing on those things that we can control. For things that we can’t, let’s understand them and build scenarios so we can react. Agility is critical. We’ll manage inventory to really protect gross margin, and that’s probably top of mind.

You recently changed the president of Vans, which is your largest source of revenue and had been thriving until recently. What are your marching orders for Kevin Bailey?

What am I looking for Kevin to do is really just wrap his head around what, organizationally, are the needs, and understanding what are the issues that the brand is contending with. Vans is not broken, but we need to fine-tune some of its business practices. Starting first with product, then how a product marries with marketing, and asking ourselves whether our storytelling lines up appropriately with an upcoming launch.

A few months ago, you told investors that both Vans and Supreme had lost some of their brand heat. Given that they are both hip, street brands, isn’t it to be expected that once in a while they’ll lose a bit of their heat, given that they’re part of a large corporation?

I don’t think it’s fair to say that it’s because they’re part of a large company. I think it is fair to say it’s the natural ebb and flow of a consumer brand. When you’re hot, and Vans was red hot, you know there’s another side to it. We were really open with investors that we weren’t going to continue to grow at those 20%-plus rates. 

So what’s your philosophy as the CEO of a portfolio company on when to step in and get more involved with a brand that is struggling?

The way we manage our businesses is that we don’t impose on our brands in terms of the things that they need to do. They own it 100%; the brand vision, the strategy, the activation. Where we do get engaged is really the strategic platforms that serve them, like technology. But you don’t see us mucking around in the front end of the business, nor would we ever give the consumer a sense that a brand is part of a large corporation. It’s their job to stay front and center with what the consumer wants.

Before the Supreme deal in 2020, Wall Street was clamoring for you to make a big acquisition, after seven years without one. How does Supreme’s current slower growth affect your appetite for dealmaking?

M&A is a critical part of our strategy. There’s always a discipline in how we look at our portfolio of brands. You’ve seen us reshape significantly, going from 32 to 12 brands in the last few years. We moved away from that mid-tier and mass channel. (The company spun off its entire denim business in 2019, which included jeans brands Lee and Wrangler.) In all cases, we had great brands, but we determined that for some brands, we weren’t the best owner and we weren’t feeding those brands in a way that was fair. For acquisitions, the number one strategic lens is the total addressable market. We also want the brands we operate to be more direct-to-consumer.

You moved from North Carolina to Colorado in 2019. You gutted this downtown building we are sitting in and created a state-of-the-art headquarters with amenities like a bike servicing center and an area for rooftop yoga, only to have the pandemic keep employees apart. Any regrets about spending so much money on the new HQ?

No regrets on our part. The conviction that brought us here remains exactly the same: to have these brands co-located. On our peak day this year, we had 675 people back in the office [out of 950], and it was electric and people were excited to see one another. We’re leaving it to managers to make those decisions at a team level. You can see [the team cohesion] when we’re all in the cafe having lunch together. You’re able to stop and say hi, have a quick conversation. We want to be back.

One of your rivals, Patagonia, is very outspoken in its political activism, even suing former president Donald Trump over national lands protection. The North Face was part of a group of retailers boycotting a trade show for returning to Utah in protest over leaders there who opposed federal land protections. What’s your philosophy on speaking up about social issues?

We’re a company for profit. We’re here to serve our shareholders. We’re comprised of individuals who have personal opinions and personal points of view. We have to keep those separate and we have to be really clear on what VF stands for: we empower sustainable and active lifestyles for the betterment of people in the planet. So we’re going to have a point of view around climate, we’re going to have a point of view around access to public parks and national parks because that’s central to our brands. We have points of view on abortion rights. I have a very strong point of view, but that’s not something that’s central to our strategy. So we make a choice of what we work on internally versus externally.

VF stands for Vanity Fair, a brand you shed 15 years ago. Have you thought about changing the company name?

VF is enough of a brand among the people who need to know it, so there’s no reason to change our name. VF Corp is an employer brand. We’re an operating company that owns dynamic, consumer-facing brands. We don’t need to be known by consumers. Investors know us, stakeholders know us.

Get to know Rendle: 

• He studied kinesiology at the University of Washington because he wanted to “understand how the body moves, how the body functions, and anatomy.”
• Rendle travels to British Columbia every winter to partake in a form of backcountry skiing that’s only accessible by helicopter.
• Early in his career, he worked for the maker of Gore-Tex, whose products he sold to The North Face. In 1999, he joined The North Face, which VF bought a year later.