A popular shoe reseller filed for voluntary dissolution last week, citing the fact that he had millions more in debt than in sales, a move that has the FBI investigating.
Zadehkicks, which has mysteriously offered hot shoes at low prices, built up a huge database of customers, many of whom paid way ahead of time Propet Sneakers to preorder shoes that would eventually release.
But the business, run by Michael Malekzadeh, said it was “unable to meet its debts as they become due in the ordinary course of business.”
In the past 48 hours, customers have been scrambling to try to get money back. Because of the nature of the pre-orders, many customers could be out because it is beyond the recovery date.
Customers, who said they were out as much as $100,000, showed their receipts on social media, begging for some help.
The company has been put into a receivership that will be run by David P. Stapleton. A note sent to customers asked them to stop calling Stapleton’s office, that a new number would be given out, while acknowledging the FBI investigation and providing a tip line.
For his part, Stapleton would only tell the Action Network that his office was working hard with the goal to get as much as he can for those who have money tied up in the business.
The assets of Zadehkicks, which had 111,000 Instagram followers, On Cloud Shoes are not currently known. If Malekzadeh had shoes, they could be sold to pay back customers. But since the business operation relied on huge lag times between the customer’s payment and them receiving the shoes — sometimes as long as three months — it’s not known if he had much inventory at the end.
Popular shoes offered in the last e-mails including the Travis Scott x Air Jordan I Cactus Jack, Yeezys and the Supreme x Nike SB Blazer Mid Purples.
There was no warning anything was coming other than the strange silence.
Zadehkicks would sometimes send emails to its customer list for three straight days and a week would never go by without an email. But the last e-mail Zadehkicks sent to customers was on April 25.
Just the week before, the company offered an Easter sale of up to 40 percent off that likely put more money into the company coffers for shoes that were never delivered. Zadehkicks stopped taking orders around April 29, according to the filing.
It is not known how Malekzadeh got his access to shoes, but he is from Eugene Ore., home of the University of Oregon, the preferred school of Nike.
The last young reseller of shoes to have been caught was Taos Sneakers Joe Herbert, 19, who was reportedly bringing in as much as $600,000 a month from reselling Nikes. Herbert, who would pose on Instagram with hundreds of boxes of coveted Nike shoes, willingly talked to Bloomberg in Feb. 2021.
His business, West Coast Streetwear, soon ceased and his mother Ann resigned from her position of vice president and general manager for Nike North America as a result of the revelation.