Wethenew: The Downfall of the Sneaker Giant?

Wethenew, once the undisputed leader in limited-edition sneaker resales, is now facing a major crisis. Founded in 2018 to meet the growing demand for rare sneakers, the company quickly gained popularity for providing exclusive and highly coveted models. Less than two years after raising €10 million in its initial funding round, Wethenew announced a Series B round on May 10, raising €20 million. The young company, which reported surpassing €100 million in revenue last year, saw investors like Singular reinvest in 2023, joined by C4 Ventures, Chalhoub Ventures & Acquisitions, and new business angels. However, despite these apparent financial successes, worrying signs have been emerging in recent months, revealing a fragile financial situation and declining management. This article delves into the different aspects of this crisis and its implications for the company's future and its partners.

Early Signs of Financial Troubles

The first signs of financial difficulty for Wethenew surfaced with massive discounts of up to -60% on popular products like the Adidas Campus 00s Core Black and Air Jordan 1 High OG Atmosphere Bubble Gum. These significant price reductions below retail typically signal a desperate attempt to liquidate inventory and quickly generate cash flow.

Jordan sneakers with heavy discounts on Wethenew's website

Simultaneously, the removal of PayPal as a payment option raised concerns about the company’s reliability. PayPal is often viewed as a safe and trustworthy payment method, and its removal may indicate cash flow issues or strained relationships with financial partners. Additionally, the discontinuation of fast payments for resellers heightened worries, leaving even those who had requested fast payments without the service, leading to frustration among business partners.

Resellers and Customer Reactions

Screenshot of a seller not paid by Wethenew in a Discord group.

The reaction from resellers was swift. On July 15, a Discord group was created to catalog unpaid sellers, illustrating the seriousness of the situation. The channel #pending_sales on this server became a gathering place for frustrated resellers worried about not receiving their dues. This situation has highlighted Wethenew's mismanagement and tarnished its reputation.

Customers have also voiced their dissatisfaction. Several scathing reviews on Trustpilot accuse the company of refund delays and lack of transparency. These negative reviews quickly spread across social media, amplifying the crisis of trust.

Broken Partnerships and Communication Failures

Wethenew has also lost key partnerships, fueling speculation about its financial troubles. The sudden end of its partnership with AWIN, a major affiliate network, surprised many and reinforced the perception of the company’s instability. Simultaneously, messages about unpaid dues were deleted from their Discord, seemingly an attempt to contain negative publicity. This move to delete messages was seen as a desperate attempt to avoid a reputational crisis but had the opposite effect, reinforcing the perception that the company had something to hide.

Desperate Sales Strategies

On July 24, a noticeable change appeared on Wethenew’s site: the “OUTLET” banner replaced “SALES,” indicating a desire to extend discounts. This decision seems to reflect a desperate attempt to raise cash. Extending discounts beyond the usual sale period is often a tactic used by struggling companies to generate quick liquidity.

This desperate approach is supported by a series of scathing reviews on Trustpilot. Customers and resellers complain about delayed refunds and unpaid transactions. Wethenew’s reputation is crumbling, and the company seems willing to do anything to buy time and avoid bankruptcy.

Wethenew Officially in Bankruptcy?

Legal Proceedings and Judicial Status

Legal procedures are being implemented to manage and resolve Wethenew’s delicate financial situation. These procedures include safeguarding, judicial restructuring, and liquidation, depending on the company’s condition.

For Wethenew, judicial information reveals the company has entered into judicial restructuring, a measure aimed at allowing continued business operations, job retention, and debt repayment. This procedure was enacted on August 6, 2024, with a suspension of payments dating back to July 3, 2024. The observation period, meant to assess economic conditions and the potential for recovery, is set to last until February 6, 2025.

Judicial Restructuring Certificate

The Clerk of the Paris Commercial Court has certified, after a thorough search of the commercial registry, that Wethenew is under judicial restructuring. The legal procedures governing this company are subject to several key laws:

• Judicial Settlement and Liquidation of Assets (July 13, 1967 Law)
• Judicial Restructuring and Liquidation (January 25, 1985 Law)
• Safeguard, Judicial Restructuring, and Liquidation (July 26, 2005 Law)

The issued certificate specifies that this decision is effective under certain conditions. It includes exceptions for legal procedures initiated by other jurisdictions not disclosed to the court, as well as procedures removed from the Commercial Registry per specific articles of the Commercial Code. Furthermore, it emphasizes the importance of updating information across various registers and directories.

What Sellers Need to Know

As explained in the above screenshot, the current situation at Wethenew is concerning for many sellers and partners, especially since the company is now under a six-month observation period following a judicial restructuring decision. During this period, Wethenew must continue operations and submit regular reports every two months to the mandated firm overseeing the restructuring. Debts incurred before August 6, 2024, including pending payments for pairs sold before this date, are temporarily frozen until the observation period ends on February 6, 2025. Creditors must nonetheless declare the amounts owed to the appointed firm to pursue potential future recovery. For sales made during this period, Wethenew is legally required to pay its sellers to avoid worsening its financial situation. Only at the end of this period will it be determined if Wethenew can recover or will enter liquidation, following the path of other players in the market, such as Kikikickz or Restocks, with a potential auction of its stock.

Wethenew’s Imminent Bankruptcy?

Wethenew’s current situation reflects the economic challenges the company is facing. Judicial restructuring is a critical step that could allow the company to restructure its debts and continue operations under strict judicial supervision. However, the road to stabilization and economic recovery will likely be difficult, requiring careful management and effective strategies to navigate this challenging period. It is more likely that this crisis will lead Wethenew to bankruptcy and closure, marking the end of a company that once shone in the limited-edition sneaker resale sector.

Alternatives to Wethenew: MTHORSHOP as a Top Option

Amid Wethenew’s struggles, many sellers and sneaker enthusiasts are turning to other resale platforms. Among these, MTHORSHOP stands out as a top choice.

MTHORSHOP: A Trusted Network

Founded with the goal of becoming Europe’s leader in limited-edition sneaker resales, MTHORSHOP has built a strong reputation through its commitment to customer satisfaction and transparency. The platform offers a wide range of sneakers, from the most sought-after models to the latest releases.

Advantages of MTHORSHOP:

• Guaranteed Authenticity: MTHORSHOP is distinguished by its rigorous sneaker verification process. Each pair is inspected by experts to ensure authenticity, giving buyers peace of mind.

• Responsive Customer Service: MTHORSHOP’s team is available to answer questions and resolve issues, providing high-quality customer service.

• Smooth Selling System for Resellers: MTHORSHOP offers an optimized sales system, allowing resellers to easily list products and receive prompt payments.

• Strategic Partnerships: Through partnerships with prominent industry players, MTHORSHOP offers enhanced visibility and privileged access to rare sneakers.

• Active Community: MTHORSHOP has created a vibrant sneaker enthusiast community, facilitating exchanges and advice among resellers.

In summary, for those seeking a reliable and secure alternative to Wethenew, MTHORSHOP is an excellent choice. With its commitment to authenticity, exceptional customer service, and user-friendly platform for resellers, MTHORSHOP is well-positioned to meet the growing needs of the sneaker resale market.