In the first in-depth interview on organized theft by a retail CEO, Kimbell told police that a ring of professional thieves was using Amazon to resell millions of dollars in cosmetics stolen from Ulta stores. responded to a month-long CNBC investigation showing how police dismantled the network.and other retailers across the United States.
Kimbell did not comment directly on Amazon, but said the online marketplace is “part of the problem.”
”[Online marketplaces] “The scale and opportunity for people to liquidate this product has increased,” Kimbell said in an on-camera interview with CNBC. “Before, you had to sell stolen goods at flea markets, out of the trunk of your car, or perhaps locally. Now, with more sophisticated tools, you can reach far and wide nationally and even internationally. became.”
As part of an investigation into retail crime syndicates and the actions companies and law enforcement are taking to crack down on the problem, CNBC reports that prosecutors are accusing San Diego of using Amazon's digital storefronts to resell products. We tracked down a case involving a woman named Michelle Mack. Stolen from the store.
The 53-year-old mother of three and her husband Kenneth Mack were charged with organized retail theft, grand theft and conspiracy to receive stolen property in connection with the criminal organization charges. When they raided a California mansion in December, California Highway Patrol and Homeland Security officials found $387,000 in suspected stolen goods, most of it from Ulta. It was announced that it was a thing. Investigators say her criminal organization brought in millions of dollars over more than a decade. Michelle Mack and Kenneth Mack both pleaded not guilty.
The scale of such an operation was not surprising to Kimbell.
“Unfortunately, similar things are happening in other parts of the country, so I'm not really shocked,” Kimbell said. “The scale of this time is significant. But this is what is happening and this is the environment in which we operate.”
Ulta Beauty CEO Dave Kimbell said online marketplaces need to do more to prevent the sale of stolen goods.
CNBC
Kimbell said he doesn't believe consumers are responsible for determining whether products they buy from online marketplaces are stolen. He added that many shoppers may not even consider that items could be stolen from one retailer and sold at another, and that this is primarily an online phenomenon.
“That doesn’t happen in brick-and-mortar stores.” [stores].You're not going to go to a retail store and meet someone. [at] previous table [selling] “We shouldn't have an environment where you can steal from one retailer,” Kimbell said. [have it] Eventually it will end up on other platforms, other large mainstream platforms. ”
Anyone selling products online “should strive to ensure that what they sell is not stolen goods,” Kimbell said.
“I can say with 100% certainty that nothing we sell on Ulta.com or any other online platform is stolen from another retailer,” he said. “We have the tools, the data, the analytics, and the ability to collectively take more action.”
Amazon declined CNBC's request for an interview, but said in a statement that the e-commerce giant “does not condone the sale of stolen goods.” An Amazon spokesperson said the company invests $1 billion a year and employs “thousands of people” to fight fraud, including in detection and prevention tools.
A spokesperson said Amazon is working with law enforcement and other retailers to “stop bad actors and hold them accountable.”
In the Mac case, Amazon said it had not received any signals indicating that sellers were unloading stolen goods. Mack's page was deleted after his arrest.
It is unclear exactly how big a problem organized retail crime is. The National Retail Federation and Retail Industry Leaders Association say not all cases are reported, tracked or tabulated.
According to the latest NRF research on shrinkage (an industry term for loss of inventory due to damage, theft, or other causes), the total amount of merchandise stolen in external theft incidents in 2022 will reach $40.5 billion, accounting for the largest share of total shrinkage. It accounted for 36.15% (compared to 37 years). % in 2021.
Ulta Beauty is one of many retailers that has begun to discuss retail crime as an issue, but has not quantified how it is impacting its business. Ulta Beauty's Chief Financial Officer Scott Settersten and Chief Operating Officer Keshia Steelman have discussed theft and organized retail crime, particularly on earnings calls and investor conferences.
Ulta Beauty said it aims to have all of its fragrances in stores in the first few months of this year. Kimbell said fragrance was one of the hardest-hit categories for retailers because of its high value and relative ease of resale.
The CEO did not quantify the increase in retail organized crime his company has experienced, but said “the situation is definitely getting worse.”
“Retail crime continues to be a part of the retail industry…but what we've seen in the last few years, actually in the last few years, is a significant increase,” he said.
According to the NRF survey, retail executives are increasingly concerned about an increase in theft-related violence, with 81% reporting an increase in violence and 28% saying their company is It has been reported that the store has been closed. Ulta said it has not yet closed any stores due to crime.
Kimbell said he is particularly concerned about how the rise in crime will affect Alta's 50,000 employees at 1,400 stores nationwide.
“These situations… are not fun… they are threatening, they are intimidating,” Kimbell said. “They can be traumatic.”
– Additional reporting by Ali McCadden.
