During his freshman year of college in 1996, Jordan Geller spent the money his parents gave him for living expenses on a pair of sneakers – the coveted and newly launched Air Jordan 11 OG ‘Bred’ shoes. .
“I was 23 when I bought my first pair of Jordans, and at the time I didn’t consider them assets – they were just things I loved and always wanted when I was a kid, but couldn’t, because they were too expensive,” Geller said in a phone interview.
“I only walked on the heels of the shoes because I didn’t want to have creases on my toes. And every day after I got back to my dorm, I cleaned them with a toothbrush to keep them as pristine as possible.
From partnerships with luxury brands to collaborations with celebrities and athletes, the sneakers have caught the eye of alternative asset buyers looking to make a profit in the resale market with these limited shoe releases.
The growing popularity of shoes as an alternative asset has even caught the attention of investment firms.
In a note to customers dated June 6, Cowen Inc. estimated that the sneaker and streetwear resale market has the potential to reach approximately US$30 billion worldwide by fiscal year 2030.
“Our proprietary work confirms that sneaker resale remains one of the most permanent consumer trends as transient pandemic-related spending patterns fade into 2023 – and we further reinforce the bullish category calls we have launched since 2019. Sneaker resale significantly outpaces the broader e-commerce ecosystem, which is slowing in early 2022,” the report states.
In 2000, when Nike released a retro version of the same Jordan shoe that Geller had purchased four years earlier, he decided to try selling his old sneakers to help cover the cost of a brand new pair.
“The shoes sold for US$162.50. When they were new in 1996, I bought them for US$125 – so I sold my used shoes for more than I paid for them,” Geller said.
Since then, Geller’s life has revolved around sneakers. He even won three Guinness World Records for his collection. The first record he reached dates back to 2012 for his collection of 2,388 pairs of sneakers.
In 2019, Geller sold the most expensive sneakers he owned – a pair of Nike Waffle Racing Flat Moon Shoe— for US$437,500. Two years later, he broke his own record with a pair of Air Jordan 1 worn by the game which sold for US$560,000 at a Sotheby’s auction.
When it comes to breaking down the huge demand for these sneakers as an alternate asset, Geller said one has to look to Michael Jordan’s loyal fanbase.
“To start and describe the lore around Jordans, you have to understand that Michael Jordan is so charismatic, so many people love him and adore him,” Geller said.
“A lot of us grew up looking at it and wanted these shoes, but they were too expensive. The nostalgia we all feel for this sneaker makes us want to have it, but Nike keeps releasing shoes in limited quantities, so you pay two to three times more on the resale market.
BILLION DOLLAR ALTERNATIVE ASSETS MARKET
StockX, a trading platform for alternative assets such as sneakers and trading cards, said Jordan shoes were the top-selling brand on its platform in 2021, with Jordan sneakers reselling 54% of more than the retail price.
“The popularity of Air Jordans can be largely tied to the level of exclusivity. Virtually all Jordan releases are limited edition, which means there are never enough to satisfy market demand,” said Jesse Einhorn, Senior Economist at StockX, via email.
Einhorn said the request for Jordans was also tied to pop culture. Following the April 2020 release of “The Last Dance” on Netflix, a documentary that followed Michael Jordan and the Chicago Bulls as they sought their sixth National Basketball Association title in 1997, trading in Jordan sneakers increased by more than 40%.
INCREASE IN DEMAND DURING LOCKDOWN
While many retailers have seen a slowdown in demand during the COVID-19 pandemic, some collectible store owners said they’ve benefited from a surge of customers looking to spend the extra cash.
“I guess because people got their stimulus checks and so on, they had more disposable income to spend on things. A lot of people were stuck at home and they wanted to do something with their money,” said Godfrey Chui, owner and chief buyer of streetwear retailer OD Toronto, in an interview.
“The other reason the market is up is that there was a huge movement and subculture of new collectors on TikTok, so recently there’s been a spike in demand, especially for women’s sneakers. .”
Before the pandemic, Chui said he offered about 15-20 pairs of women’s sneakers in his store and has now expanded to dedicate an entire wall to them.
But it’s not just social media that has helped women’s sneaker collection become more mainstream.
Makeway co-owner Shelby Weaver said there had always been a very strong group of collectors, but with a big shift to remote working during the shutdowns, more people turned to buying casual clothes.
Weaver said Jordans were the most popular shoes in his store, which targets women and members of the LGBTIQA+ community.
“It is by far our most popular brand. It’s even hard to get an account with [the Jordan brand] now having one already is almost a privilege in the sneaker world,” Weaver said over the phone.
Weaver added that over the past five years the shoe brand has started to focus more on what shoe collectors want, but many product versions are bought by investors who want to make money. with the collection rather than wearing them.
“It’s a bit of a weird gray area for stores because the demand is really high right now, which is what makes us successful, but a lot of people are buying them just to resell them, which takes the products away from people who love them. I guess that’s just what the sneaker game is now,” she said.