It’s no secret that the sneaker industry has changed since its early heyday. The former subculture has evolved into a mainstream ecosystem with everyone wanting a highly-coveted pair of their own, resulting in a $30 billion aftermarket explosion that has captured the attention of mischievous money-makers.
From pseudo-pre-orders á la Zadeh Kicks to bot entries reaching nearly 12 billion per month, the never-ending pursuit of Got ‘Em has created a new-age supply-and-demand that is exchanged after hours at the backdoor.
A new report from the Wall Street Journal reveals that the backdoor isn’t the only order of business for sneaker scammers as organized crime is on the rise throughout the supply chain.
Earlier this year in June, the Los Angeles Police Department recovered $7 million worth of stolen Nike sneakers that were stashed at a nearby warehouse after being taken from trucks near the Port of Los Angeles. This robbery is perhaps the largest in Swoosh history as the previous year had a sneaker ransack of its own with $800,000 worth of product stolen from Nike’s Memphis facility.
Since then, it seems that the supply chain’s organized crime has not slowed down.
According to theft prevention organization CargoNet, theft across the supply chain has increased by 63% during the first half of 2023, compared to the year prior.
Keith Lewis, Vice President of Operations for CargoNet, claims that “the supply chain is under siege at the moment” and that theft is happening at every point. Additionally, Lewis warns that organized crime appears to be more advanced than CargoNet with every move.
“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,” Lewis said.
According to the report, organized crime rings familiarize themselves with store layouts and create lists that track high-heat inventory. The designated retail lookouts communicate with trained cargo thefts to target shipping containers of the sought-after product. Of course, all this wouldn’t be possible without some sort of collusion involving insiders from retail and logistics companies, cited by the National Retail Federation.
Nike has made an effort to prevent theft at one of its storefronts in Portland, with the Swoosh asking the city government for more police officers to guard the grounds, even offering to pay more for protection. This request was denied by Portland city officials but the Beaverton-based company is sure to be thinking of alternative protective practices to combat theft.
At this time, the Swoosh has not publicly disclosed any financial losses related to theft or stolen goods and did not provide a comment when approached by the Wall Street Journal.