Sneakers Craze

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Filip Orth III
Founder of PHORTEC s.r.o. & student
Bratislava, Slovakia

Sneakers are sport shoes that originated as shoes used for playing tennis. In recent years, there has been a great surge in demand for sneakers, especially the limited editions, the so-called “deadstock sneakers”. Deadstock sneakers are sold in limited numbers at retail and are not available for sale anymore – unless a restock is planned in the future.

There are no doubts that the “sneaker hype” emerged with the famous NBA player Michael Jordan. His first sneaker collaboration contract with Nike was announced in 1984 and started with the Air Jordan 1s. The brand became famous and Nike soon decided to move on to new models. Michael Jordan´s branded Nike shoes – commonly also called the Jordans – are definitely the most collected iconic sneakers ever. However, everything had started in 1917, when Converse released the Chuck Taylor´s Converse shoes, which marked the beginning of the sneakers culture as we know it today.
In recent years, the sneakers boom has become far more significant and the brands have embraced it, especially major companies such as Adidas, Nike, Under Armour, Puma, etc. Due to the entire buzz around shoes, sneakers are perhaps turning into the most important outfit element for many people. Big brands have replied with clear messages by releasing tremendous amounts and varieties of models from their lines. Even people who are not following the sneakers culture developments are familiar with many of them globally. For example, currently the Yeezy line or the “new in the game” NMDs are some of the dominating models from Adidas. Both of these lines are mostly deadstock, resulting in great demand from customers who are willing to pay an immense amount of money for buying them from a reseller. Resellers usually buy for a retail price and then try to sell the shoes for a much bigger amount, depending on the availability of the sneakers and the customers’ demand.

 

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Since sneakers have created a space for further business, people are showing even more interest in them, especially in terms of investments and the price premium. A space opened for resellers, shops, collectors, blogs, websites, cross-products (e.g., shoes cleaning products) and more. Some people started to view it as a form of investment, seeing the potential, while trusting the demand to meet the asked prices. Even though it is a tangible investment, which may not be easy to handle for companies for some years, it may still be of greater interest for the customer. For example, mentioning the Yeezys, the first 350 Pirate Blacks from Adidas (2015) have been going for the original retail price of $200. The shoes were almost impossible to find, even in the official stores. If they were available, they sold right in the morning of their release. Stores had to organize raffle events to create a fair chance for everyone to get a pair, while avoiding the situations of people getting into physical fights.

Yeezys bought at $200 at retail could be sold for at least $1500, depending on the size and the condition. Investors or sneaker collectors, known as “sneaker heads”, view the smallest and the largest sizes as the most valuable, since they are produced in even smaller quantities and therefore come with a higher price, compared to standard sizes. Some food for thought – if you bought Air Jordan 3 Black Cement in 2011, you would have earned 162% by 2015, which is more than you would have earned from Apple (134%) or S&P 500 stocks (82%). This fact may speak for the strength of the sneaker hype, however, caution is recommended, as it is with everything with a rapid growth in value.
Source: www.stockx.com



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