Over a decade of low interest rates has resulted in a number of assets rising in value. The rich have invested in art, securities, wine, real estate, vintage cars, and now, it seems, old sneakers. Sneakers are the next investment asset. According to a report by Deutsche Welle, the price of old sneakers has skyrocketed in recent months, with Nike and Adidas, the world’s greatest sneaker brands, especially in demand.
What is Driving the Sneaker Boom?
Sneakers first assumed a cultural importance when Nike used its partnership with Michael Jordan to increase their sneaker’s brand strength. Air Jordan became a symbol of urban cool. And decades later, they are an iconic brand. Hip hop culture embraced sneakers and cemented them in the imagination as symbols of cool. The association was clear: from celebrity to ordinary person on the street, if you wanted to be cool, you needed to have sneakers.
In tandem with that, dress codes became more relaxed and streetwear became the norm. Sneakers entered the mainstream. The pandemic made streetwear even more wide-spread. Working from home relaxed dress codes even more. As stores selling dress shoes struggled to sell their product, sneaker stores struggled to keep up with demand.
How Do You Know If Your Sneakers Are Genuine?
Brand-name sneakers have become so valued that there is a whole industry around authenticating sneakers. For example, Sneaker Con Digital authenticates new sneakers retailing for over $100, and secondhand sneakers worth more than $150. It specializes in Nike, Adidas, Gucci, Puma and Louis Vuitton sneakers.
Where Are Old Sneakers Sold?
Platforms, which match supply and demand, have emerged to help match people selling old sneakers, with those who want to buy them. For instance, StockX is a platform featuring authenticated sneakers and streetwear. The company authenticates every pair of sneakers it sells, and also maintains a database of resale prices, price histories, and keeps statistics on long-term trends. StockX has been incredibly successful, selling $1.8 billion worth of sneakers in 2020 alone.
Fundamentally, there is limited supply of marquee sneakers and very high and rising demand. The result is that prices keep going up.
What Does the Typical Customer Look Like?
The typical customer is young, with 70% of sales made to people under 35.
How Do Prices Behave After Sneakers Have Been Bought?
Resale values of marquee sneakers tend to go up with time, assuming that the sneakers are kept in good, unworn condition and the original packaging is still there. For example, if you kept a Nike Air Max 1 sneaker between 2020 and 2021, you will have had a 50% gain in value of that sneaker.
Sneakers have been sold on Sotheby’s since 2019. Sotheby’s record for sneakers is $437,500 for a pair of Nike Moon Shoes. In 2021, the famed auction house made sneakers a permanent category.
StockX’ most expensive sneaker is the Nike Mag Back to the Future, which it sold in 2016 for $65,000.
Perhaps the most expensive sneakers ever sold are the Nike Air 1 Yeezy prototype sneakers that sold for $1.8 million.
Ina sign of just how strong the sneaker market is, when Sotheby’s held a timed auction for 200 pairs of sneakers designed by Virgil Abloh, who had recently passed away, the price soared from $2,000 at the start of the auction, to $24,000 two days later. The most expensive pair sold for $80,000.
Why Do People Buy Old Sneakers?
Sneakers have become cultural items and a part of our history. Whether it’s Michael Jordan’s Game-worn Converse All Stars (sold for $18,000), or just a pair of Nike SBs, sneakers can become vessels of beautiful moments.
Michael Jordan, the greatest and most iconic basketball player of all time, is an important icon in the history of sneakers. It’s not surprising that Nike Air Ships worn by him sold for $1.47 million last October. In a different way, the Nike Air Yeezy 1 sneakers were also cultural symbols.
For a younger buyer, these sneakers are something that they have looked forward to owning for a long time.
Sneakers have crossed over from sports and become part of high fashion. They are no longer simply comfortable pairs of shoes, they are part of the cultural assets of our world. High fashion takes on sneakers, such as Ye’s take on the sneaker, are big events in the world of fashion. Everyone understands how important they are.
This has given rise to sneaker collectors. Although the number of sneaker collectors has risen, the production of sneakers has not. The result is a market where prices just keep going higher and higher, although it has to be said that this trend is not guaranteed. We have entered uncharted territory. The sneaker as an investment asset is something new.