A Nike executive for more than 25 years has resigned from the company after her son used one of her corporate credit cards to buy $132,000 of limited-edition sneakers to resell through his own company, the New York Daily News reported.
Ann Hebert, vice president and general manager of Nike's North America division, was named in a Bloomberg Businessweek report that said her 19-year-old son, Joe Hebert, made an online purchase of 600 pairs of sneakers – the highly sought after Adidas Yeezy Boost 350 Zyon – after they were released last year.
Mr Hebert used the Nike corporate American Express credit card, which was in his mother's name, to build up the stock of his resale business, West Coast Streetwear, and sold the shoes for more than $20,000 in profit, according to Bloomberg Businessweek.
Mr Hebert called the magazine's reporter from his mother’s number. He also sent a statement for her American Express corporate card to demonstrate revenue of his firm.
He acknowledged Ms Hebert was his mother and told the magazine that while she had inspired him as a businesswoman, he had never received inside information such as discount codes from her. Mr Hebert also requested her name not be mentioned in the story.
In a statement, Nike said Ms Hebert resigned voluntarily.
"Ann Hebert, VP/GM, North America geography has decided to step down from Nike, effectively immediately," the company wrote in an email to employees, according to Complex.com. "We thank Ann for her more than 25 years with Nike and wish her well."
Flipping sneakers has been a viable business proposition for decades. The sneaker boom has created opportunities for a new generation of speculators and Mr Hebert and other young resellers are the first to treat footwear as a bona fide asset class, products as worthy of informed valuation and investment as any other commodity, Bloomberg wrote.
The sneaker market, for this new generation of speculators, is a lot like playing any other market.
The demand for sneakers goes as far back as 1985, when Nike introduced the Air Jordan 1, a sneaker that sold faster than the company could make it. Some retailers soon began selling the few pairs they could get for more than Nike’s $64.95 suggested retail price, creating a market for sought after shoes.
Nike, based in Beaverton, Oregon, restricted the initial release of the Air Jordan 2 to 30 stores in 19 cities and added $40 to the price and the release of The Air Jordan 3, the most popular of the series, further cemented the resellers' market.
Annual sneaker trade at eBay reached $388 million in 2014, and analysts pegged the broader resale market at $1 billion. Last July, investment bank Cowen estimated the figure had grown to $2bn in North America alone, according to Bloomberg.
The Jordan Brand and Dior have now teamed up to create the much-hyped Air Jordan OG 1 Dior, whipping up a frenzy not seen in the sneaker world for some time.