The world has witnessed an exponential surge in the sneaker industry's valuation, with the aftermarket now towering at an astonishing $30 billion. This meteoric rise has, unfortunately, brought with it a wave of nefarious activities. The quest for limited-edition sneakers has seen enthusiasts employ bots and backdoor techniques to secure pairs. But a more profound, ominous threat looms: a growing network of organized criminal rings stealing Nike sneakers across their supply chain.
Earlier this year, law enforcement officials conducted a massive raid in Los Angeles, confiscating around $7 million worth of stolen Nike products. This incident was a glaring testament to the underground world of sneaker theft and reselling. Furthermore, Memphis, Tennessee – a pivotal Nike shipping hub – saw thefts at its central train yard in 2022. This led to an unexpected hiccup in the sneaker world when sales of then-unreleased Air Jordans, including the Air Jordan 11 “Cherry,” were abruptly suspended on StockX.
In a report from the Wall Street Journal, Keith Lewis, Vice President of Operations for CargoNet, a theft prevention organization, aptly commented on the situation: "The supply chain is under siege at the moment.” During the first half of 2023, compared with the year prior, theft across the supply chain has increased by 63%, according to CargoNet.
Nike has not publicly disclosed the amount lost to theft in its financial reports and did not provide a comment when approached by the WSJ.
Delving deeper into the mechanics of these thefts reveals a chilling level of meticulous planning. Organized retail crime groups familiarize themselves with store layouts and prepare lists spotlighting valuable inventory. Their precision also extends to cargo thefts, employing trained spotters capable of deducing the contents of shipping containers using the bill of lading details. Even more troubling is the potential collusion between these criminals and insiders from retail and logistics companies, as noted by the National Retail Federation.
Nike has tried to take steps to prevent theft at one of its storefronts in Portland, with The Swoosh approaching the city government and offering to pay for more police officers to guard its operation. While this request wasn’t approved, Nike is likely taking steps to increase security at all points in the supply chain, though Keith Lewis stated, “The good guys, us, we’re playing checkers, and the bad guys are playing chess. They’re always one or two steps ahead of us.”