Nike’s CEO reportedly said the firm’s recent scandal involving a former executive hurt customer trust.
According to Complex, the company’s CEO, John Donahoe, said the resignation of former vice president Ann Hebert, who left after Bloomberg reported her son ran a sneaker resale business, “sparked questions” about whether customers can trust Nike around product launches.
“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 at a company meeting, Complex reported. “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.”
Hebert resigned on March 1 after Bloomberg reported her 19-year-old son, Joe, runs the sneaker resale business West Coast Streetwear. Joe reportedly used Hebert’s credit card to buy over $100,000 worth of limited-edition shoes to resell.
Read more: Nike insiders say the company has ‘turned a blind eye’ to the shady resale industry for years, culminating in an exec resigning. Now, its CEO is reportedly tackling the issue head-on.
Hebert managed the Nike SNKRS app, which gives users access to footwear releases and events. She spent 25 years at the company and spent time as a sales representative and director of sales during her tenure.
Nike contributes to the resale market by releasing too few products to meet demand. Sneaker resellers can also work with industry insiders to get leaked details of hyped releases, Insider’s Shoshy Ciment reported.
Sources told Ciment Nike turns a “blind eye” to the resale market. “If the shoe has made it to the resale market, then it’s a win for the shoe,” one former employee told Insider.
The sneaker resale business can get violent. Last year, Two 19-year-olds were arrested in connection to the murder of a Miami high schooler who was selling three pairs of Adidas Yeezys.
Jordan Brand released its first statement on reselling violence in 2016 when vice president Howard White told Esquire, “It saddens me…’It’s a shoe that I want so I’m going to take it.’ Unfortunately those things happen, which are systemically bad.”
Nike did not immediately respond to Insider’s request for comment.