Nike’s executive saga exposes uneasy ties with resellers

Bloomberg

A senior Nike Inc executive’s abrupt departure has laid bare the sometimes-uncomfortable relationship between sneaker makers and the underground network of resellers who thrive off their brands.
The sneakerhead community was buzzing over the resignation of Ann Hebert, Nike’s vice president and general manager of North America. The revelation came just days after a Bloomberg Businessweek report about her son’s lucrative business reselling shoes.
Nike and its chief footwear rival, Adidas AG, don’t often talk about the secondary market, even as demand for rare Air Jordan 1s and Yeezys has turned sneaker flipping into a billion-dollar business. The companies don’t benefit directly from it. And since resellers make it harder for the average customer to buy their favoured sneakers, shoe brands and their retailer partners go to great lengths to stop people from scooping up multiple pairs.
Yet Nike and its peers benefit indirectly from the sneakerhead hype, giving both sides incentive to keep the resale market strong.
“The reality is resale within footwear has become critical to the entire footwear ecosystem,” said Simeon Siegel, an analyst at BMO Capital Markets. “The fact that resale exists is what allows for such strong sell-through.”
The awkward alliance — and potential for conflicts of interest — spilled out into the open after Nike announced the immediate departure of Hebert, who had been with the Beaverton, Oregon-based company for more than 25 years.
Nike didn’t give a reason for her resignation.
Joe Hebert, the executive’s 19-year-old son, flips hundreds of thousands of dollars worth of shoes each month, Businessweek reported. Nike has said the executive disclosed relevant information about her son’s business to the company in 2018, and that Ann Hebert did not violate “company policy, privileged information or conflicts of interest.”
Still, the optics can be troubling. Hebert’s responsibilities reportedly included the SNKRS app, where Nike’s rarest and most sought-after products are typically released.