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sneaker-resale-sales-down-thefutureparty

The sneaker-reselling market gets scuffed up

sneaker-resale-sales-down-thefutureparty

The sneaker-reselling market gets scuffed up

 

The Future. Like all asset and alternative asset valuations, the high-priced, limited edition sneaker-resale market has taken quite a tumble over the past few months. But the downturn (and the crypto winter and the falling tech and entertainment valuations) may be nothing more than just a correction away from absurd spending during the pandemic. Cowen & Co. thinks as much, noting that the sneaker market will grow from here on out — the highs may not just be as high.

Big step back
The sneaker-resale market was bound to get worn down eventually. After pandemic-era highs that saw the market hit $6 billion (per Cowen & Co.), the market has been in a state of cooling this year.

  • WSJ reports that limited-edition sneakers — Air Jordan, Nike Dunks, Air Force 1s — are selling for 30% less than they were just months ago and are now taking days to sell rather than minutes.
  • Top resale platforms like StockX and GOAT have seen sales declining by as much as 20% since February.
  • The market downturn is a result of surging inflation and rising interest rates, which is devaluing all that extra collection cash that seemed abundant last year.

These conditions are creating a pattern where collectors are selling their shoes for even less to get their hands back on some hard money — not just value tied up in assets.

The other shoe drops
The irony about our current cash inflation is that it looks like it came after asset inflation that took place for two years. Everything from crypto to meme stocks to even trading cards had been overvalued as people looked for something to park their time and money into (made easy by new digital platforms) with the hope of flipping a quick profit. All of those assets have lost value this year… or, as Keith Adam, the head of organized online reseller community Endurance, said, we’re just getting back to 2019 levels.

At least when it comes to the sneaker-resale market, the brands themselves — Nike, adidas, Reebok, etc. don’t care all that much about what’s happening in the resale market since they don’t see any of that revenue. Nike reported $3.6 billion in footwear sales last quarter and is even considering raising prices because demand is so strong.

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