At $1250 for a pair of Yeezy Boosts, there really may be no limit on how much people will pay for cool kicks. (pics by Caleb Silver)
Source: Have We Reached Peak Sneaker? (NKE, UA)
Sneakers have become the new housing market. I know that sounds grandiose and almost like I’m overreaching, but it’s real. I remember watching people hit up seminars to learn how to flip houses back in the mid 2000’s. I can recall explicitly how every person who was an “entrepreneur” was going to “flip this crib real quick”. When it didn’t happen “real quick” and the housing bubble burst guys were stuck with properties that entered foreclosure, families with subprime loans who were allowed to buy too much house, lost everything. As devastating as that was, my statement that Sneakers have become the new housing market seems like hyperbole for sure, but I’m a victim and I don’t mind talking about it.
I’ve been in shoes for so long that I’ve owned two footwear companies. Not online shops for flipping shoes, footwear companies. I held the license for Sho-Shot and owned ARCH footwear. I’ve also made the mistake of over investing in flipping kicks losing 50K in one pop. Sound familiar? I’m sure it does if you think about the housing market. I know others who have even more money tied up in sneakers. I’m talking six figures easy.
How are sneakers the new housing market? If you click through and read this article which focuses on Flight Club you will read about inflated prices, but what’s missing is that Flight Club is primarily a consignment based business. Flight Club is the perfect business. They have established a reputation for selling hard to find kicks. More important, they have a reputation for selling “authentic” shoes. This enables them to increase the cost on a pair of kicks in a way no other footwear seller is capable of doing. The article’s focus on FC kicks overlooks the reality of how people have saturated the resale of sneakers which has literally broken the sneaker market… or fixed it depending on your POV.
Flight Club along with Sneaker Con and Sneaker Events and countless articles on the culture has turned the most random person into a “Flipper”. I see people that ten years ago couldn’t tell you anything about sneakers now tipping store managers to hold “hot” releases and “connecting with the plug” to get ahold of shoes that they can “come up” on. Like the housing market in 08, subprime, too many sellers, not enough buyers, and too much building that caused the market to crash, the sneaker industry is currently on the inside of that crisis. That’s why this article written by Caleb Silver is a reasonable question. Have we reached peak sneaker?
Yes.
It depends on what “peak sneaker” means. To me it’s stating that the sneaker resale bubble is about to burst.
Adidas has had its best year since its heydays. Nike seemingly struggled. Under Armour disrupted for a moment, but is now on shaky ground. The bevy of smaller private companies that have interrupted the traditional running structure has created variety (think Newton, HokaOneOne and Inov8). In this influx of new companies lies opportunity for variety and customers can venture out to try something new. Customers aren’t doing this as much as they should, but the new footwear arena has contributed to the market becoming more of a level playing field.
When it comes to “hot” or “hyped” shoes though, the market has finally crashed. Like the housing market you have a few properties that break through and demand a premium. Overall, the market in resale is finally down. When you have mom and pop, couples, and kids, along with the traditional “connected” people all trying to cop to flip, what happens is the demand for those who would buy decreases; sales slow down. Like the housing bubble, right now a lot of people are investing and building businesses based on the hype of resale. A lot of people are going to crash and burn like the housing crisis. Take it from me. I can give you details and it’s not pretty.
Click the source link to read and let me know what you think. Have we reached peak and what is your definition of peak sneaker?
we’re heading that way in terms of reaching sneaker peak (by your definition). the increase in limited edition shoes entering the market makes it hard to keep up with whats current/hip. 10 years ago it used to be 1-3 hot shoes per month. now its 3/4 a week from all brands. the brands have realised there is money to be made by producing shoes with a limited cache and the sneakerheads have fallen for it. the movement has now become mainstream in the UK and every tom, dick and harry is on it in terms of flipping without understanding the culture.
I completely agree with you. Parker (Nike CEO) did mention during the Fiscal 2017 conference call that they would be scaling back SKUs, but as of right now the new market is basically flat and long term flips don’t work anymore due to restocks. The best bet is to capitalize quickly on a “hot” shoe. I’m still hoping for a return to a more diversified footwear market and a balance of wholesale/retail with great customer service. We will see.
that may not happen for a while as the brands know their wares are hot cake. they’ll be happy to sell sub-quality limited footwear knowing they’ll still make mad dough. the fight back is on as the consumer is wising up to it.
I really hope the consumer is getting smarter. I don’t know if that’s true just yet.