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Reseller fined S$20,000 for bribing store employees for info on limited-edition and discounted sneakers

SINGAPORE — After earning S$29,000 in profits from reselling a pair of Nike shoes, Meng Fanxuan began frequenting sneaker stores to buy and resell in-demand footwear.

Reseller fined S$20,000 for bribing store employees for info on limited-edition and discounted sneakers
The Foot Locker outlet at Orchard Gateway mall is one of two where limited edition “high-hit” sneakers are sold and not restocked once sold out.
  • Meng Fanxuan got his hands on confidential insider information about limited-edition sneakers
  • These shoes sell out quickly when they are launched 
  • Meng bribed an assistant manager at a Foot Locker store with about S$5,600
  • He also bribed a sales associate at another store with S$1,500 to reserve  sneakers

SINGAPORE — After earning S$29,000 in profits from reselling a pair of Nike shoes, Meng Fanxuan began frequenting sneaker stores to buy and resell in-demand footwear.

Meng then bribed an assistant store manager at Foot Locker with more than S$5,000 to get confidential information on when discounted sneakers would be available for sale, or when the chain would launch its most popular limited-edition sneakers.

Meng also gave S$1,500 in bribes to a sales associate at shoe store AW Lab, in order to reserve limited-edition sneakers for his own purchase.

For his corrupt offences, the 26-year-old Singapore permanent resident from China was fined S$20,000 on Thursday (Dec 23).

He pleaded guilty to one count of giving gratification under the Prevention of Corruption Act, with another similar charge taken into consideration for sentencing.

The court heard that Meng was serving his full-time National Service at the time as an administrative support assistant.

He had collected sneakers since 2008 when he first came to Singapore and he began reselling them in 2019 when he resold the pair of Nike shoes.

Court papers did not indicate how much they cost when they were bought and sold by Meng.

He would frequent stores to look for shoes with a potential resale profit, with his targeted customer base being in China.

He posted his products for sale on a China-based application known as Nice and was known as “Xiong Nan” in the shoe-reselling business.

HIGH-HIT AND HOT-SKU SHOES

The Foot Locker employee whom Meng bribed worked at an outlet in Jewel Changi Airport retail complex, which was the chain’s second-largest store.

The employee, Xavier Goh Yixuan, 30, has also been charged and his case is pending.

Foot Locker’s most popular limited-edition sneakers fell into two categories:

  • “High-hit” – They have a synchronised launch date across Foot Locker’s online and retail stores, and will not be restocked once sold out. They are sold only at the Jewel and Orchard Gateway@Emerald outlets, and customers are limited to one pair each
  • “Hot-sku” – Stocks are not limited and can be restocked once sold out. Customers can buy five pairs

A few months before brands such as Nike launch their high-hit sneakers, online speculation about the official release date will be rife, the court heard.

The brands will then announce the dates about two months before and the information will be publicly available online, but only employees know the exact launch date at Foot Locker outlets.

Not all retail stores could procure stocks of these shoes, which meant that customers would not know exactly which retailer would have high-hit sneakers for sale.

Customers who knew the launch dates at these retailers would stand a higher chance of buying the sneakers and reselling them at a higher price, since the sneakers would typically be sold out at Foot Locker's Jewel outlet within the same day.

This similarly applied to hot-sku sneakers, which would usually be restocked a few months later in limited numbers.

The Jewel outlet would also occasionally sell restocked sneakers at discounted prices, with the information made known only to employees.

EARNED S$6,000 IN PROFITS

Meng first got to know Goh through a mutual friend. He chanced upon Goh at the Jewel outlet in August last year and told him that he was interested in buying discounted sneakers, asking Goh to update him about any future sales.

Meng saw this as a potential opportunity to earn extra income with such insider information.

Soon, Goh allegedly contacted Meng to ask if he was looking for Nike Air Jordan 1 sneakers or other discounted ones.

Meng then offered to pay for information about the launch dates of high-hit or hot-sku sneakers, as well as the sale dates of discounted sneakers, by sharing the profits of sneakers he resold.

The court heard that with information provided by Goh, Meng bought at least 11 high-hit or hot-sku shoes at the earliest timing on the first day they were available for sale.

He also transferred S$5,681 in total on 22 separate occasions from August last year to January this year to Goh.

He would avoid contact with Goh when buying them at the Jewel outlet, so that the other employees were unaware that they knew each other.

Meng managed to earn at least S$6,000 in profits from reselling the sneakers he got.

Goh was fired by Foot Locker on Jan 29 this year.

Aside from this, court documents stated that Meng bribed AW Lab sales associate Muhammad Faiz Amy Jasman, 28, with S$1,500 in total on five occasions between September and October last year, as rewards for reserving limited-edition sneakers.

Faiz has been charged over this, and is also accused of obtaining more bribes from another person for the same purpose.

Those convicted of corruption can be fined up to S$100,000 or jailed for up to five years, or punished with both.

Related topics

court crime bribery corruption sneakers shoes Foot Locker

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