The $1 billion sneakerhead culture
The insatiable demand for rare sneakers has resulted in the growth of a very valuable global market.
Image © efetovaa
For a growing number of young people around the world, sneakers (often called ‘trainers’ in the UK) have been anything but shoes to be worn until they fall apart. Over recent years, enthusiasts have been forging what is now described as a ‘billion-dollar market’ in buying and selling this popular type of shoe, and the brand owners are only too pleased to help by producing limited edition specials that go on to be worth many times the recommended retail price.
Well-attended trade fairs specifically for sneaker collectors are opening their doors in cities around the world. While the majority of these events are held around North America (where the profit in the market was first recognised), other shows have been organised in such diverse locations as London and Melbourne. These fairs allow ‘sneakerheads’ (as industry aficionados are called) to buy and sell footwear – in some cases for more than $1,000 per pair. Interestingly, while some of this footwear is always kept in a mint condition (known as ‘nib’ – for new in box), many items are purchased, worn (carefully, to avoid scuffs) and then resold.
While crowds flock to these organised events, most sneaker sales – up to an estimated 95 per cent – are actually made online. This global marketplace provides the ability to ship shoes from New York to London. The new owner may then ‘flex’ his or her latest ‘kicks’ – that is, show off these new shoes either via social media or in real life – after which the footwear may be sold on to a sneakerhead in Sydney or Hong Kong for a profit. Obviously, any wearer is careful to avoid scuffs or other marks that would affect the resale value.
The opportunities for trade are considerable. For example, the Vancouver Streetwear Community Facebook page is said to have no less than 22,000 members. The collecting of sneakers has also gained a sizeable following in Europe and Asia. The power of celebrity culture can be clearly seen in the sneakerhead community. For example, a ‘hypebeast’ is a follower of fashion who only buys the latest sneaker releases – and especially desires the shoes that famous people are wearing.
With considerable sums of money changing hands between sneakerheads, it is vital for buyers to develop an almost encyclopaedic knowledge of the shoe to avoid being seriously out of pocket.
“If you make a bad play and you buy fakes, you’re out of money,” said one sneakerhead regarding the hustle of trading. “There’s a kid a couple months ago who was buying a couple thousand dollars’ worth of stuff. He lost about $5,000 in fake items.”
When it all began
According to devotees of sneaker collecting, the market for such footwear started in the late 1970s as part of the rapidly expanding b-boy and hip-hop movement of New York City. The craze spread around the USA with the introduction of Nike’s Air Jordans in 1985.
Even though these sneakers retailed for $125 at the time ($284.37 at 2017 rates), stores could not keep up with the demand, and Air Jordans soon became a sought-after status symbol. This success encouraged Nike to produce a new Air Jordan style each year, and they became so popular that one in every 12 Americans is estimated to have owned a pair by the early 1990s.
However, such mass production failed to impress some sneakerheads, who wanted their shoes to stand out as different from the rest. This led many of them to track down vintage styles that were no longer being produced. As these shoes were in short supply, sneakerheads sometimes travelled hundreds of miles to find just what they were looking for.
Today, it is not unusual for committed sneakerheads to own several hundred pairs of shoes, most of which are called ‘deadstock’, meaning that they have never been worn – and probably never will be.
Working the market
When shoemakers learned about the considerable effort sneakerheads were willing to make in order to find a pair of almost-unique shoes, they started to produce limited edition ‘colourways’ – colour schemes and materials available across a particular line. Today, most major producers offer limited edition colourways in very limited runs – often fewer than 500 pairs worldwide. These are normally only available at handpicked stores, with the launch events often seeing crowds queuing for days even before the stock arrives. On occasions even robbery and violence has been reported due to the rarity of the sneaker and its subsequent value on the open market.
Other sneakers are even more sought after by the serious collector. One type is known as a ‘friends and family’ edition – a special style designed for a company or celebrity to be given away as promotional items or gifts. These colourways usually total less than 100 pairs, so are highly desirable on the collector's market. There are also prototype colourways called ‘samples’ that were never put into production and so-called ‘player’s edition’ shoes that were made for a high-profile celebrity's personal collection.
The global market for collectable sneakers has steadily grown during the last decade and now is estimated to be worth more than $1 billion. The resale value of limited edition shoes can be extraordinary – Nike’s ‘Back to the Future II’ shoe, released in 2016, is the most expensive training shoe on the planet, with a reported average resale price of $32,275. If the popularity of limited edition launches, large swapmeets and the prices paid online are anything to go by, footwear manufacturers will continue to fuel the demand for years to come.
This article was originally published on page 46 of the November 2017 issue of SATRA Bulletin.