Image via @west.coast.streetwear
The biggest sneaker industry story of the young year is the resignation of longtime Nike VP Ann Hebert, an employee of 25 years who stepped down from her role in charge of the brand’s North America business last week. Her resignation was prompted by a Bloomberg Businessweek story focusing on her 19-year-old son, a reseller named Joe who runs a sneaker resale operation called West Coast Streetwear out of a warehouse in Oregon. The piece on Joe made public for the first time his connection to one of the highest-ranking executives at Nike, raising questions over whether his mother was complicit in his business of flipping shoes. Was she helping him get limited-edition sneakers to resell for profit? How aware was she that her son was doing, according to Bloomberg Businessweek, $200,000 in monthly revenue? How aware was Nike? Here’s how the saga of Ann Hebert and West Coast Streetwear unfolded, and what Nike plans to do about it.
Joe Hebert's Reselling Business, West Coast Streetwear
Before his name became a trending topic on Twitter, Joe Hebert’s identity as the person behind West Coast Streetwear was largely under wraps. On his Instagram, where he proudly posed next to tall stacks of Air Jordans, Nikes, and Yeezys, his face was blurred in every photo, and similar precautions were taken during appearances on other users’ social media. Joe’s efforts to maintain anonymity were spoiled late last month when Bloomberg Businessweek ran a story connecting him to the resale business. The article also indicated that Hebert made purchases for West Coast Streetwear with a credit card belonging to his mother, Ann Hebert, who at the time was VP of Nike North America. According to Bloomberg Businessweek, Joe Hebert requested that his connection to Nike not be mentioned in the story and ended communication with the publication after its discovery. As of publishing, West Coast Streetwear’s Instagram handle remains active, although its Twitter page states that the account has been suspended.
Ann Hebert had Disclosed Details to Nike
When the author of the Bloomberg Businessweek story discovered that Joe’s mother was a Nike exec, he reached out to the company for comment. A spokesperson told him that Ann disclosed relevant information about West Coast Streetwear in 2018 and that “there was no violation of company policy, privileged information or conflicts of interest.” In an internal Nike meeting held in the wake of Ann’s resignation, Nike’s president of consumer and marketplace and former manager Heidi O’Neill said that the inquiry from Bloomberg Businessweek set off an internal review of the connection between Ann and her son’s business. O’Neill, who was Ann’s manager in her most recent role, said on the call that the company did not find that she’d explicitly violated any policies. But, O’Neill said, Nike leadership believes she demonstrated poor judgment in her handling of the situation and failure to continue to share updates about Joe’s burgeoning business.
Ann Hebert Resigns From Nike
Less than a week after Bloomberg Businessweek’s article unveiled the connection between West Coast Streetwear, Ann and Joe Hebert, and Nike, the former VP of Nike North America announced her resignation from the company on March 1. An internal email sent to Nike employees stated that Ann had decided to step down from the company. In addition to the internal messaging, Nike also issued a press release to the public.
“Nike, Inc. announced that Ann Hebert, vice president and general manager, North America geography, has departed from the company, effective today, March 1,” reads the brand’s official statement. “Hebert leaves Nike after more than 25 years with the brand. Nike plans to announce a new head of its North American geography shortly.”
While the brand said then that Ann made the decision to resign, O’Neill put it slightly differently during Nike’s internal all-hands meeting, saying that “together with Ann, we decided that it was best for her to resign.” O’Neill said that the review triggered by the Bloomberg Businessweek story gave Nike a more complete understanding of Joe’s business.
How was Joe Hebert Getting the Shoes?
When the story about West Coast Streetwear and the reveal of Joe’s familial connection to Nike went live, many speculated that his mother was materially supporting his business by procuring limited sneakers for him to resell. In her role at Nike she oversaw SNKRS, the oft-maligned mobile app notorious for frustrating consumers with limited-edition drops and quick sellouts. Sources, some of them resellers also based in Oregon, tell Complex that was not the case. They say that the majority of his stock was acquired through using bots, programs that cheat releases by buying out stock at lightning speed, for online sneaker drops. They also say, though, that his proximity to Nike helped him build a network of people who were willing to buy stock on his behalf for his business at Nike’s company store in Beaverton, Oregon. At the store, which is open only to employees, their family, and special guests of Nike, product is available for 40 to 50 percent off original retail price. This makes anything purchased there automatically more enticing for a reseller in terms of profit margin.
Nike CEO John Donahoe Discusses Scandal in Internal Meeting
The company held a virtual all-hands meeting on Monday to debrief the thousands of employees that work on its North America team on Hebert’s exit from the company and the next steps. During the call, Nike CEO John Donahoe discussed what action they will take to regain consumer trust and create clearer policies for what conduct is appropriate for employees.
“There’s no value more core to who we are than the trust our consumers put into us and our brand and our products,” Donahoe said. “And the fact of the matter is, this incident has sparked questions in some of our consumers about whether they can trust us, particularly around launch product.”
He also said that Nike has to better ensure that its online releases are not compromised by bots and that it will double down on anti-bot measures. This plan has been met with much cynicism from sneaker consumers online, who have so far expressed doubt that Nike will enact real change in the way it releases limited-edition sneakers in the wake of the scandal.