- Nike Executive Ann Hebert has voluntarily resigned from the company after it was revealed that her son used her credit card to purchase more than $100,000 worth of new shoes for his shoe-resell business.
- The connection was first noticed by Bloomberg reporter Joshua Hunt, who was working on a profile of Hebert’s son, Joe.
- According to a Nike spokesperson, Hebert disclosed the relevant information about her son’s business to the company and hadn’t violated company policy.
- Still, Hunt’s report led to swift condemnation for Hebert, with many believing she had used her position to help her son scalp shoes.
Nike Exec Resigns
Nike Executive Ann Hebert voluntarily resigned Monday after Bloomberg exposed her connection to her son’s sneaker flipping business last week.
The report, published on Feb. 25, follows 19-year-old Joe Hebert and details how he spent more than $100,000 buying new shoes to resell at his business, West Coast Streetwear. In the article, reporter Joshua Hunt noted that types of shoes Joe bought would sell out in hours and that for people like him, “The sneaker market… is a lot like playing the [stock] market.”
“In the hours after siphoning up stock from retailers, they essentially sell short-term futures based on street sentiment,” Hunt said.
While scalping is a controversial enough practice on its own, near the end of the article, Hunt notes an unusual connection.
“At one point in late June… [Joe] phoned me, and the number was identified as belonging to Ann Hebert,” Hunt said. “I looked the name up and discovered there was an Ann Hebert who’d worked at Nike for 25 years and had recently been made its vice president and general manager for North America.”
Notably, the April 2020 press release announcing Ann’s new position stated she would be “instrumental in accelerating our consumer direct offense in North America.” That initiative redirected sales from retailers directly to consumers, and as a result, it helped to fuel the resale market.
“[Joe] Hebert later sent me a statement for an American Express corporate card for [West Coast Streetwear]… and it was in Ann’s name,” Hunt said in his article.
Hunt said he later asked Joe about the connection and while Joe admitted that Ann was his mother, he said she was too high up at Nike to be involved in what he does and that he’d never received inside information, such as discount codes, from her. He then insisted that she not be mentioned in the article and cut off contact.
From there, Hunt reached out to Ann and Nike directly. While Ann didn’t respond, a spokesperson told Hunt that Ann hadn’t violated company policy and that she had disclosed the relevant information about her son’s business to Nike.
Ann’s resignation comes amid outrage online, but the reaction to her resignation itself has been mixed.
There’s been no shortage of criticism against Ann following the announcement of her step down, and she’s even become the butt of a number of jokes. Still, others have defended her.
“The worst part is that Ann Hebert worked her way up the ladder in a male-dominated industry for 25 years only to be knocked down by her clout-chasing son,” TV host Tamara Dhia tweeted.
Others have said that with everything publicly known so far, they still feel like Ann was in the wrong.
I wish y’all would stop with this. She is no victim. Most retail companies have a non compete agreement with their employees & for her the ADULT to knowingly allow her son to do this makes her complicit at worse & sketchy at best. If this had been a store employee they’d be fired pic.twitter.com/aPeLZnS3Bt— @bayaangs_over_baghdad (@Kaijutsu711) March 2, 2021
See what others are saying: (Complex) (CNBC) (New York Post)
Nike To Clean and Resell Used Sneakers at a Discounted Price
- At least 15 Nike retail locations in the U.S. are participating in a new program the company calls “Nike Refurbish,” which is aimed at reducing waste.
- As part of it, Nike will restore shoes with manufacturing flaws, as well as donated or returned shoes, and resell them at a discounted price.
- Shoes at the end of their wear will be recycled into Nike Grind materials that are used to construct running tracks, gym floors, playgrounds, other Nike products, and more.
Nike announced a new program on Monday called “Nike Refurbish” that will help boost sustainability and reduce waste.
As part of the program, the brand will take donated and returned shoes that are like new or gently used, as well as shoes with cosmetic manufacturing flaws, then clean and restore them to resell at a discounted price. Returned shoes must have been brought back within Nike’s 60-day return period in order for them to be resold.
All the refurbished shoes will have labeling on the box with information about their condition grade. Plus, they are also covered under Nike’s 60-day return policy.
Nike’s Recycling Efforts
Nike didn’t say what it previously did with returned sneakers in its announcement, but the new plan is part of its wider attempts to recycle materials.
On its website, it markets the initiative as a way for customers to “help keep shoes out of landfills.” and join Nike’s efforts towards, “Zero carbon and zero waste to help protect the future of sport.”
Shoes that are truly at the end of their wear will be recycled into Nike Grind materials that are then used for tons of other projects, including running tracks, gym floors, playgrounds, outdoor courts, as well as other Nike apparel and footwear.
So far, 15 Nike retail locations across the U.S. are confirmed to be participating in this model, but there are plans in place to expand this list over the course of 2021.
See what others are saying: (FOX Business) (Footwear News) (Miami Herald)
Uber Sees Record Ride Demand But Doesn’t Have Enough Drivers Available
- Demand for Ubers outpaced driver availability in March, according to a Monday statement from Uber.
- On top of seeing its best-performing month since the beginning of pandemic closures, the company also received more bookings last month than any other month in its entire history.
- In an attempt to attract more drivers, Uber announced a $250 million, one-time stimulus payment last week to “boost” driver earnings.
- While Uber said it believes it will turn a profit for 2021, the company could be set back more than $500 million because of a U.K. Supreme Court ruling that gives the country’s drivers minimum wage, holiday pay, and pension.
Uber Posts Record-Setting Growth
Uber announced Monday that its ride requests for the month of March were the highest it has ever recorded in its 12-year history.
According to a filing with the SEC, last month, the company crossed “a $30 billion annualized Gross Bookings run-rate.” Alongside that, average daily Gross Bookings grew 9% from the previous month.
Notably, this also marked the company’s best month since March of last year, when pandemic closures began in the U.S.
On top of that, Uber said its delivery business crossed “a $52 billion annualized Gross Bookings run-rate in March, growing more than 150% year-over-year.”
In fact, that demand over the past month was so high that Uber didn’t have enough drivers to meet it.
“As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed courier availability,” the company said.
$250 Million Driver Stimulus
Monday’s filing is in line with another announcement from Uber, which said last week that it is opening up a $250 million driver stimulus to “boost” earnings for drivers.
“In 2021, there are more riders requesting trips than there are drivers available to give them—making it a great time to be a driver,” the company said at the time. “We want drivers to take advantage of higher earnings now because this is likely a temporary situation.”
“As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels.”
Can Uber Become Profitable?
In February, Uber reported $6.8 billion in losses for 2020, and for years, many have questioned if its business model is even profitable at all; however, in this latest filing, Uber said it believes it’ll become profitable by the end of 2021.
That said, last month, the Supreme Court of the United Kingdom handed drivers a major win by ruling that they need to be reclassified as “workers,” guaranteeing them minimum wage, holiday pay, and pension.
While big news, the U.K. classifies “workers” and “employees” separately. As a result, U.K. drivers still aren’t granted full benefits.
The decision will also likely be a setback for Uber, as Bank of America has estimated that it could cost the company more than $500 million.
Uber’s Vaccine Access Fund
In other Uber news, the company — along with PayPal and Walgreens — has launched a “Vaccine Access Fund.”
Through that fund, customers can donate money that will be used to help people who normally lack transportation get to their vaccination appointment.
Notably, all three companies have said they’ll donate a joint $11 million.
That’s on top of the $5 million PayPal previously donated, as well as the 10 million free and discounted rides Uber promised to give in December.
Uber users are able to donate in-app, and PayPal has launched a donation page on its website.
See what others are saying: (The Wall Street Journal) (CNBC) (CNET)
China Hits Alibaba With $2.8 Billion Antitrust Fine
- Chinese regulators slapped Alibaba with a $2.8 billion fine for monopolistic practices on Saturday, which amounts to 4% of the e-commerce mega-giant’s domestic sales.
- Regulators accused the company of specifically engaging in a policy known as “choose one out of two,” where Alibaba would penalize sellers who also used other platforms to sell their goods.
- CEO Daniel Zhang believes the company won’t be negatively affected by the fine, which could have been set as high as 10% of all sales.
- Despite the fine, the company’s stock rose over 6% by Monday’s closing of the Hong Kong stock exchange.
Dominating the Marketplace
The Chinese e-commerce giant Alibaba was hit with a $2.8 billion antitrust fine by Chinese regulators on Saturday for using its dominant position in the market to punish merchants and rivals.
In particular, it engaged in a policy known as “choose one out of two,” where a seller on Alibaba would be penalized in a variety of ways if they were found to be selling on another platform.
While the $2.8 billion fine seems large, it only accounts for 4% of the company’s domestic sales. The fine could’ve been far worse, as antitrust fines in China can go as high as 10% of the company’s annual sales.
Alibaba has agreed to take the fine, not fight it, and will fully comply with the demands of the regulators. Those demands include three years of “self-examination compliance reports” to ensure the company isn’t engaging in the same practices.
The news comes after the company’s founder, Jack Ma, has been under intense scrutiny from Chinese officials. Ma has not been seen in the public eye for months and his Ant Group, a sister company to Alibaba, is being forced by Chinese regulators as of Monday morning to become a financial holding company; therefore facing much stricter banking regulations.
Clear Sailing From Here
Fortunately for Alibaba, the company has managed to dodge much of the scrutiny Ma faces as he isn’t really involved with the business anymore. Its current leadership also doesn’t think the fine will really affect the company at all. Unlike Ma’s past rhetoric that was dismissive of regulators, CEO Daniel Zhang released a statement on Saturday that struck a conciliatory tone.
“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” he said.
Zhang added Monday morning that he doesn’t expect any negative impacts from the situation, which possibly helped Alibaba’s stock to rise sharply from $223 per share to $241 as of Monday’s closing of the Hong Kong Stock Exchange, where the shares are traded.
There are a plethora of reasons that could explain the stock’s rise just after it was the target of a major antitrust fine, but notably, there doesn’t seem to be any more antitrust fines in the pipeline, leading investors to be confident that the worst is behind the company.