Nike has warned retailers that their supply of limited edition, coveted trainers could potentially be restricted if they continue to supply resellers with pairs.
The sportswear giant’s retail partners have been told they face a “supply curtailment” over concerns that too many pairs of shoes are being handed to resellers who then sell them for huge profits on online platforms such as StockX.
‘Sneakerheads’ were seen gathered outside JD Sports’ flagship store on Oxford Street last week to grab a pair of the brand new Air Jordan’s and Nike Dunks, since then, the Jordan’s have been seen for up to £376 on StockX.
The resale market has boomed over the last 12 months, with resale platform StockX enjoying its best two months last summer in May and June.
READ MORE: Nike severs ties with 7 more retailers including Urban Outfitters and Macy’s in latest DTC push
The market has been fuelled by resellers who are able to purchase computer software, or ‘bots’, which enable customers to purchase trainers quicker than is possible when purchasing the trainers manually.
“Nike is frustrated that their best customers are not able to get the products they want and frustration among customers is as high as it’s ever been. The current model is unsustainable,” senior advisor at NPD Matt Powell said.
It was recently reported by Bloomberg Businessweek that the son of Nike’s North America general manager was making over $50,000 a month online reselling limited edition trainers.
The announcement follows Nike’s decision to severe ties with a number of retailers in its bid to shift further towards direct-to-consumer sales, giving it a larger slice of the profit.
Nike cut ties with several of its “strategic partners” last year, including Zappos, Belk, Dillards, Boscov’s, Bob’s Stores, Fred Meyer, EBLens, VIM, and City Blue.
The sportswear retailer plans to roll out around 200 smaller-format Nike Live stores to maintain its high street presence.