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Is the sneaker stock exchange the new Wall Street ?

Fashion

On August 13th, a pair of Nike Air Jordan’s worn by Michael Jordan were sold for 615,000 dollars in an auction at Christie's. A record price and the perfect illustration of the extent to which the sneaker market has gone wild. Numerous platforms including StockX, Flight Club and The Sole House have specialised in this domain with a resounding success. So much so, they’re turning into veritable stock exchanges. Wall Street take note... 

Air Jordan "OLYMPIC" (1992) © Christie's.

In July 2019, the NYPD was forced to intervene and shut down the Adidas pop-up store launching its collaboration with the brand AriZona Iced Tea.  With the shoes selling at just 99 cents, the Originals x AriZona Iced Tea event escalated into a riot in south Manhattan. A teenager, who’d arrived outside the store at one in the morning, had to be evacuated after being struck on the head with a glass bottle. Just a few hours later, a pair was sold on eBay for more than 300 dollars. Whilst not a unique occasion, it shows the madness reigning over the sneaker market for nearly a decade now. 

 

StockX, the new Wall Street

 

Created in 2016 by a former IBM engineer, the online sneaker reselling platform StockX today counts some 14 million users a month and counts big names such as Google, Mark Wahlberg and Eminem amongst its famous stockholders. It functions in pretty much the same way as a classic stock exchange: a seller names their price and buyers take the auction up – or down. And StockX doesn’t hesitate to play with the codes of Wall Street. In October 2019, in a partnership with Adidas, the platform did a fake introduction onto the stock exchange for the launch of three limited editions of the Adidas Campus 80’s. 

 

Elevated to the lofty heights of art works, some sneakers have become veritable investments. Many of the pairs resold on StockX have never even been worn. And that’s because the buyers can hope to resell their purchases for up to 25 times the original price. Like the Nike Air Yeezy 2 Red October – the ultimate design from the collaboration between Nike and Kanye West – that were originally sold for 250€ when they were launched in 2014 and are now worth an estimated 6,454€ on the platform. 

Estimated at 28,681€, the Nike Air Mag Back to the Future is the most sought-after sneaker on StockX.

 

 

Collector fever pitch 

 

Record prices are shaking up the codes of sneaker culture. Made popular by the pioneers of hip-hop and the basketball legend Michael Jordan in the 1980s, today the sneaker is a veritable marketing object, one which the biggest luxury brands have also been quick to embrace. Collaborations between Air Jordan and Dior, Alexander McQueen and Puma, Rick Owens and Adidas all play on the rarity and the brevity of the drops of these limited edition designs, generating a feverish climate among collectors.  

 

A strategy that works just as well when cheap brands get involved. July 2020 saw a limited edition pair of sneakers launched by the German discount supermarket  Lidl causing a stir on the internet after a pair was resold on eBay for a whooping 1,255€. Far from damaging the classic channels of distribution, the second hand market is perceived by brands as a new stage in the life of their sneakers, offering an attractive return to the spotlight. 

 

Sneakers Lidl (2020) — Limited edition

 

 

Sneaker authenticator, a future job

 

But how can we be sure of the authenticity of these designs bought for such extortionate prices on auction sites? While numerous buyers still prefer classic portals such as eBay, Facebook Marketplace and Amazon, this is exactly where the counterfeits appear. In contrast, StockX guarantees the reliability of its designs at 99.9% and owes much of its incredible success to a whole new job description: “sneaker authenticator”. In each of the five centres belonging to the platform in the USA and in Europe, a dozen employees are devoted to verifying the condition and authenticity of these shoes through a series of 50 steps - that remain top secret. While discouraging counterfeiters, they’re ensuring a beautiful future for the sneaker stock exchange.