Rising Sneaker Supply Chain Theft Attributed To Organized Crime
As the sneaker aftermarket experiences an exponential surge, the brands driving this growth find themselves increasingly targeted by a rising tide of theft orchestrated by sprawling networks of organized crime. The Wall Street Journal’s latest report reveals that these thefts span the entire supply chain, from distribution centers and storage facilities to delivery trucks and retail stores — with Nike being particularly hard hit.
In a significant warehouse raid conducted by the Los Angeles Police Department this year, approximately $7 million USD worth of stolen Nike products were confiscated. This heist marked one of the largest blows to Nike, exposing an intricate web of organized theft that had reached an unprecedented scale. In a separate incident in 2022, Nike’s Memphis facility suffered a robbery amounting to around $800,000 USD worth of products, leading to a halt in the sale of yet-to-be-released Air Jordans on platforms like StockX. Additionally, Nike’s retail stores worldwide have faced recurring episodes of orchestrated theft.
Keith Lewis, Vice President of Operations for the theft prevention organization CargoNet, succinctly summed up the situation for the Wall Street Journal, stating, “The supply chain is currently facing an onslaught.” CargoNet’s data indicates a 63% surge in theft across the supply chain during the first half of 2023 compared to the same period in the previous year. Lewis went on to emphasize the strategic edge of the thieves, stating, “The criminals are strategizing several moves ahead while we are still trying to catch up.”
The orchestration behind these large-scale thefts is meticulous and systematic. As outlined in the report, members of organized crime groups meticulously study retail layouts and compile lists of high-value merchandise. These “store watchers” then relay their findings to those responsible for cargo theft, directing them to shipping containers housing the targeted goods. Compounding the challenge, thieves often collaborate with insiders from both retail and logistics companies, as noted by the National Retail Federation.
In an attempt to bolster security, Nike took steps at its Portland location by offering to pay city police officers to guard its store. However, this proposal was rejected by local authorities.
Nike has not publicly disclosed the exact financial impact of organized theft in its financial reports, nor has the company provided an official statement on the matter.
