Reselling Is Just One Part of a Broken Sneaker Supply Chain

The cover story of Bloomberg Businessweek’s March issue highlights a new class of sneaker consumer who treats the sneaker not as an item of cultural relevance, but a “pandemic-proof” financial product whose value could be speculated on, for large fiscal gains, if one had enough liquid capital.

The story marks a flashpoint in a transformation that’s been underway in the sneakerhead community for years. The pursuit of collecting sneakers, by definition, is a combination of culture and capitalism. But as sneakers pivoted to an “asset class,” as Bloomberg defines it, the resellers have swooped in, not caring about the Staple Pigeon, MF DOOM, Wu-Tang, or what the SB in SB’s stands for. A large part of the community now is solely focused on profit. 

The story centers on Joe Hebert, a 19-year-old Portlander who’d dropped out of University of Oregon to work on this business. Hebert coordinated with other members of a “cook group,” a usually private channel of sneakerheads who use automated scripts, or “bots,” and insider information to gain an advantage in securing limited-release sneakers at the point they’re released. 

In one example, employing his cook group, Hebert was able to purchase $132,000 worth of Yeezy sneakers. Bloomberg reveals that this purchase was made with an American Express card that belongs to his mom, who happens to be Ann Hebert, an executive at Nike for 25 years, who’d been in charge of Nike’s push to sell directly to consumers. In the story, a spokesperson from Nike insisted that Hebert had made the necessary disclosures about her son’s business, West Coast Streetwear, in 2018. However, she resigned from Nike five days after the article was published. 

Members of the sneakerhead community were not as surprised by Herbert’s story as everyone else might be. “When sneakers got into pop culture and became a bigger part of pop culture, the opportunists jumped in—and their entrepreneurial spirits, as they call them—and used that as an opportunity to make money.” Jacques Slade said. Slade is a sneaker content creator who started as a sneaker writer before creating his own YouTube channel in 2013, which now has 1.3 million subscribers. “Sneakers have always been an investment in one way or another. The resellers aren't something new.” 

Resellers, previously seen as a blight, are now glamorized, Slade said. “There is a social currency appeal to being a reseller that was not always there.” Joe Hebert, The subject of the reseller story, Slade said, “fits the archetype of what most people think of when they think of a reseller: a kid that's privileged, whose parents have money, and they're able to kind of jump in this just to make money and not really participate in the culture.”

Slade, like some sneakerheads, is a conscientious objector to the resale market. For that reason, Hebert and West Coast Streetwear wasn’t on his radar. “I don't participate or buy from individuals like that,” Slade said. “That's kind of my way of taking a stand against it in a sense. I'm sure I'd probably seen a meme of him around on the internet somewhere.”

Slade feels a responsibility to stay away from resellers. “Because of my position in the community, I try to take a position that you don't need the expensive shoes in order to feel cool.” 

He does see a positive in this story hitting the mainstream. He’d actually published a video suggesting how Nike fix its SNKRS app a day before the Bloomberg story dropped. “A broader audience is seeing the underbelly of the sneaker market, and how the brands are participating in that underbelly. That's what I appreciate most about the article. It's bringing to life something that's always been there and that people have been speaking about. But now they have to deal with questions from people outside of the industry.” 

Resellers are just part of the ecosystem that sneakerheads see as flawed. Arguably, at the core, is the artificial scarcity created and controlled by the sneaker companies themselves. 

“This is the Supreme model of keeping things super limited on the supply side.” said Nick Engvall, a sneaker enthusiast, creator and consultant, who’s been in the sneaker industry for over 15 years, including a stint as an early StockX employee. 

“The only reason that this really bubbled up and became a huge issue is because you're seeing pictures of [Hebert] buying shoes that just aren't available anywhere, and the quantities that you would never see without having a very close connection to the company or direct access to when and where these products are going to be available,” Engvall said. 

Engvall anticipates the Bloomberg story will cast a negative light on resellers like Hebert, and prompt a correction. He points to Adena and Chad Jones, founders of Another Lane, the Black-owned community-oriented marketplace mentioned in the Bloomberg story, as part of a movement away from the blatant money grabs. “We'll start to see that swing, because articles like this, elevate it to a point where everybody wants to be a little bit more distant from this money-driven approach. Because the community—whether that's good or bad—the community is up in arms right now about this whole story,” Engvall said. 

YouTuber and sneakerhead DJ Willingham traveled to Hebert’s warehouse in August 2020 for an interview with the reseller behind West Coast Streetwear. “All I knew was he was using bots like every other kid in America that bots,” Willingham told VICE in an email. “The first time I met him was that day when we shot that video. It was all new to me. I was just there to make a video. Didn’t know it was gonna turn into all of this.” 

In an interview with Willingham in 2020, Hebert plugged his cook group, which cost $50 per month to join, as a way to “invest in yourself.” He also explained his business strategy. "I'm totally willing to dump literally all of my money into a shoe,” Hebert said. “I'm not gonna go home with an L." 

Bloomberg describes the sneaker game in traditional finance terms: flipping sneakers is now arbitrage. Bundling lower-tier “bricks” into tranches. If sneakers were stocks, Hebert was a trader, and his mom worked on the New York Stock Exchange. There are previous examples of Nike suing former employees for “insider trading” (selling stolen sneakers.) And if sneakers were regulated financial instruments, he’d likely be under investigation by the Securities and Exchange Commission.

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