The thriving sneaker aftermarket recently witnessed an unfortunate escalation in theft incidents attributed to an expanding web of organized criminal networks.
A fresh analysis from the reputable Wall Street Journal highlights the pervasive nature of these robberies, permeating every facet of the supply chain, spanning distribution centers, storage facilities, delivery vehicles, and retail stores. This concerning trend has notably overshadowed Nike and its operations.
A significant event occurred in June of this year when the Los Angeles Police Department executed a massive warehouse raid, successfully seizing approximately $7 million of stolen Nike merchandise. This incident, one of the largest in Nike’s history, served as undeniable evidence that covert organized theft networks had reached unprecedented sophistication. In a prior occurrence during 2022, Nike’s Memphis facility fell victim to a theft of around $800,000 worth of products, prompting a halt in the sales of yet-to-be-released Air Jordans on platforms like StockX. A series of orchestrated retail robberies have also plagued Nike’s global store network.
Keith Lewis, serving as the vice president of operations at CargoNet, an organization focused on theft prevention, succinctly expressed the gravity of the situation to the Wall Street Journal: “The supply chain is facing an ongoing assault.” According to CargoNet’s data, theft incidents along the supply chain surged by 63% during the initial half of 2023 compared to the corresponding period in the previous year. Lewis further emphasized the asymmetrical nature of this challenge, stating, “While we, the lawful actors, are engaged in checkers, the illicit actors are orchestrating a game of chess. Their strategic advantage often places them a step or two ahead of us.”
The orchestrators of these large-scale thefts exhibit meticulous planning and execution. As outlined in the report, members of organized crime groups meticulously study the layouts of retail establishments and compile lists of high-value inventory. These “store watchers” then collaborate with cargo theft specialists, guiding them toward specific shipping containers housing the targeted goods. Compounding the issue, thieves frequently collude with insiders within retail and logistics enterprises, a fact underscored by the National Retail Federation.
Nike initiated enhanced safeguards at its Portland retail outlet to bolster security measures, even offering to compensate local police officers for guarding the premises. However, the municipal government declined this proposition.
While Nike has refrained from disclosing the precise financial toll resulting from organized theft in its financial disclosures, the company has not provided an official statement on the matter.
Concurrently, in a separate development, Foot Locker opted to decline the restocking inventory of the Adidas YEEZY line, citing concerns related to public relations.
