Organized Crime Responsible for Rising Theft Across Entire Sneaker Supply Chain
Robberies, at every point of the distribution channel, increased by 63% in the first half of this year.
As the sneaker aftermarket continues to skyrocket, the brands behind its growth continue to face increasing levels of theft from an ever-expanding network of organized crime rings. According to a new report from the Wall Street Journal, the robberies have towered across the entire supply chain, from distribution facilities and storage trains to delivery trucks and retail outposts — and they’ve particularly affected Nike.
In June of this year, the Los Angeles Police Department confiscated roughly $7 million USD worth of stolen Nike products in a massive warehouse raid. The robbery was among the largest to affect Nike, and it was infallible proof that the hidden network of organized theft had reached an unprecedented level. In 2022, Nike’s Memphis facility was robbed of approximately $800,000 USD worth of products, leading to a suspension on sales of then-unreleased Air Jordans on StockX; and the company has faced repeated organized retail robberies at its stores across the globe.
Keith Lewis, the vice president of operations for theft prevention organization CargoNet, offered a straightforward comment to the Wall Street Journal: “The supply chain is under siege at the moment.” Per CargoNet, theft across the supply chain increased by 63% in the first half of 2023, when compared to the same period in the year prior. “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 added.
The planning that goes into these large-scale robberies is highly meticulous. According to the report, members of the organized crime rings study retail layouts and create lists of big-ticket inventory. The store watchers then communicate their findings to cargo thefts, directing them to shipping containers holding the desired products. Furthering the trouble, thieves often collude with insiders from retail and logistics organizations, per the National Retail Federation.
At its Portland outpost, Nike attempted to implement higher security, offering to pay the city’s police officers to guard its store. However, the local government denied the request.
Nike has not shared the financial sum lost to organized thefts in its financial reports, nor did the company supply a statement on the matter.
Elsewhere, Foot Locker declined adidas’ YEEZY restock inventory due to PR concerns.
