Nike is about to face its biggest test as sneakerheads pounce on the new 'Lost and Found' Jordan 1, and the brand tries to rebuild trust with fans

• Nike will release the Air Jordan 1 Chicago "Lost and Found" on November 19.
• The company will likely release more pairs than usual to make them available to more customers.

Nike knows sneaker collectors are frustrated.

For years, the company's most-hyped shoes have too often been snapped up by resellers who use computer programs, better known as bots, or backdoored by sneaker boutiques that it partners with.

The Air Jordan 1 Chicago "Lost and Found," which will be released November 19, is the latest and biggest test of Nike's work to make drops more fair. In line with its ongoing efforts, Nike's already given some die-hard fans early access to the shoe, will likely release more pairs than usual, and recently announced plans to crack down on resellers who buy multiple pairs of the same shoe on its app and website.

Thousands of sneakerheads will likely be left empty-handed this weekend because of high consumer demand for the classic colorway. Still, analysts said the company's work to make drops more fair is starting to pay dividends.

"For so many years, if Nike was doing anything to solve unfairness or if they even recognized that it was an issue that needed solving, there was no transparency or acknowledgment to the consumer that was the case," said Dylan Dittrich, the head of research at Altan Insights and the author of the book "Sneakonomic Growth," which tracks the growth of sneakers as an asset class. "Not everyone will hit on every product. But the process isn't quite as much of a black box as it used to be, and in terms of perception, there was really nowhere to go but up."

Nike's CEO John Donahoe acknowledged in a March 2021 internal meeting that Nike had a problem with consumer trust, despite years of work by the company to defeat the bots that snap up limited-edition products.

"We've been working on anti-bot technology for the last several years," Donahoe said, according to an account of the meeting published by Complex. "That is part of the solution, but we need to double down our efforts."

Criticism of how Nike releases sneakers spiked last year after the son of a former Nike vice president, Ann Hebert (now Freeman), was found to be reselling shoes in mass, fueling complaints that some people had more access to the hottest shoes than others. During the peak of the pandemic, as supply chains snarled and consumers had more money to spend, many models, including Jordan 1s and Dunks, were also difficult to acquire at retail.

Donahoe told Wall Street stock analysts last December that Nike had created a "dedication score" designed to help the most loyal customers get more access to hot sneakers, noting invitations to purchase the popular Air Jordan 11 "Cool Grey" were sent to the "largest female-focused group yet and sold out in the first hour."

"We continue to see Exclusive Access serve as a defining marketing mechanism to connect with consumers," Donahoe said.

This weekend's launch of the Air Jordan 1 Chicago "Lost and Found" comes with the latest iteration of Exclusive Access. The company said customers who had lost 20 previous raffles for Jordan 1s on its SNKRS app were eligible for Exclusive Access.

It's also been reported that the sneaker will drop in significantly higher volumes than similar releases in the past, meaning collectors will have more chances to get a pair, part of a pattern that seems to extend to the recent "Fire Red" Air Jordan 3 and "Playoff" Air Jordan 12 releases.

The potential downside: Too many Jordans could reduce demand in the long term. In 2017, there were so many retros on shelves that Wall Street encouraged Nike to pull back, with Sam Poser, then at Susquehanna Financial Group, writing, "Nike should be aggressively reducing the pairs available for the Jordan Retro launches so not to leave residual product in the marketplace which would likely damage the brand's cachet."

Poser doesn't have the same concerns today, noting Nike has bigger problems to solve.

"Jordans and Air Force 1s and Dunks are still doing great," he told Insider, adding that the problem for Nike right now is ongoing supply-chain chaos and inventory buildup, not too many Jordans. The company in September reported a 44% increase in inventory and is discounting non-retro products.

Among its remaining challenges, Nike must be even more transparent about Exclusive Access selection, said the sneaker and sportswear digital creator TJ Keasal.

"All eyes are on Nike for transparency to adhere to the parameters they voluntarily offered to the public," she said. "Was it really targeting only accounts with 20-plus Jordan 1 losses? And if not, Nike risks a loss of good faith."