A Question Of Ethics As The Resale Sneaker Industry Grows
MARY LOUISE KELLY, HOST:
How much money is too much money to spend on a pair of sneakers? Well, among sneaker enthusiasts, otherwise known as sneakerheads, the most coveted shoes can fetch tens of thousands of dollars on the resale market. Bloomberg BusinessWeek has declared that sneakers are now a bona fide asset class, and their rising value has resulted in more scrutiny too. Earlier this week, a Nike executive resigned following news that her 19-year-old son allegedly used a credit card in her name to buy $130,000 worth of sneakers for his resale shoe company. Here to talk about this is Michael Sykes. He's a staff writer for USA Today. He writes the newsletter The Kicks You Wear.
Michael Sykes, welcome.
MICHAEL SYKES: Thanks so much for having me.
KELLY: So briefly tell us more about this Nike exec. Do we know how much she knew about what her son was up to and why she's stepping down?
SYKES: Yeah, so Ann Hebert was an executive at Nike. She was the vice president and general manager of Nike North America. She knew about her son's business, his resale business. She reported it to Nike in 2018. And now she's stepping down, it seems, because it sort of caught a storm nationally, and this is a story that is now a national headline.
KELLY: Yeah. Well, big picture as to why people are shelling out thousands and thousands of dollars for sneakers, and especially in the middle of a global pandemic where nobody can go anywhere anyway, I understand this has actually fueled the resale sneaker industry. How come?
SYKES: Yes, absolutely because everyone is sort of looking for a side hustle now, right? We're living in a time where people don't necessarily know where their next check is going to come from. So if you can hit on the sneakers app and buy a pair of Dunks, then maybe you can take them to a platform like StockX and flip them for, you know, maybe two or three times the retail price. And that's a come-up for people. That's another way to make money.
KELLY: You mentioned StockX, which, for people who don't know it, this is, like, the eBay of really cool sneakers (laughter). Is that fair? I've actually...
SYKES: That's fair to say.
KELLY: I've got it up right now. There's actually a little ticker tape of sneaker prices that is scrolling across the bottom of the screen, constantly telling me which shoes are up $81, or - oh, wow, somebody is down $349 today. I mean, how does that work? To what extent do you think this is driving prices versus merely reflecting them?
SYKES: So it's all a matter of supply and demand, right? There are these companies that make these shoes and sell them at retail value. But the thing about it is that a lot of these companies, like your Nikes, like your Adidas, will actually shorten the supply of these shoes. And so the fewer shoes that there are available, the quicker they are going to hit a platform like StockX and the higher the price will get on the resale market because they're so rare. And so the shoes that we see that are costing, you know, upwards of 5-, 6-, $700 are the shoes that are really rare and hard to find.
KELLY: What's the record?
SYKES: The record - it's really hard to say. If you want to consider donations, then the Doernbecher Raffle that happened this weekend - the shoe actually - the Doernbecher Jordan 1 actually hit $2.2 million, which is...
KELLY: Did it actually sell for that?
SYKES: Yeah, that was the price. I believe they actually shut the raffle down because they didn't want that much money for the shoe. But it just - the fact that someone was willing to pay that much for a shoe is wild.
KELLY: It is wild indeed. That is Michael Sykes, staff writer for USA Today and writer of the newsletter The Kicks You Wear.
Michael Sykes, thank you.
SYKES: Thanks so much.
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