The KYW Holiday Mailbag — 📥 The sneaker bubble bursting, Adidas reshuffling and more
This was fun!
Gooooood morning, folks! Welcome back to the Kicks You Wear. Thank you so much for rocking with me today. I appreciate you.
Last minute holiday shopping week for yerboi. I am STRESSED. Well, not really stressed. I’m pretty much done with everyone. Just broke. But still! Tis the season, right? Right.
Let’s jump into this mailbag. What follows are the responses to questions and comments you all sent via the Google form I sent out last week. I picked out some faves and tried to answer as much as I could in the most concise manner possible.
Hope you enjoy! I sure did.
Is this the year the sneaker resale bubble bursts?
The writer continues, “It's inevitable - no chance StockX, GOAT, etc are worth their valuations and when their unsustainable business models start to crack, all the other ecosystem players basing their business on those platforms (resellers, botters, likely even local sneaker stores) are going to die off. Just not sure it's RIP Good Times next year or whether things hang on for a bit.”
So this is THE big question that everybody wants an answer to for 2023. Folks have been asking for years. When will the sneaker bubble finally burst?
My answer: I think we’re actually living in that burst bubble right now. Most folks haven’t quite realized it yet, but the signs are all there between dipping resale prices, retail price hikes and the glut of inventory brands across industries have on their hands now. That’s why those holiday sales are so good, y’all.
Think about it: Things have been culminating in a rupture of the sneaker market for years now.
We kept seeing all of these massive valuations for the sneaker business and the secondary market from articles pumping footwear as an “asset class” leading up to 2020.
We get to 2020 and the COVID-19 pandemic starts. At the same time when folks are losing their jobs, they’re also looking for new hustles and income to survive. Flipping sneakers becomes one of those hustles.
At the same time, folks are also getting infusions of cash from the stimulus checks we all received. Many used most of it for necessities, of course, but some of that cash was certainly spent on the fun stuff like sneakers.
Now we’re here. That extra cash is gone. Inflation has cooled, sure, but it’s still very present in our lives. Sneaker prices are up by 2.3%, Footwear News’ Shoshy Ciment. That matters.
And from there it just boils down to a simple scenario. Are you spending that $200 on groceries or getting that new pair of Jordan 1s you’ve been eyeing? For most people, it’s the groceries. The sneakers aren’t as important and they have less secondary market value now.
On the other hand: There will always be sneakers like the Lost & Found 1s or the Travis Js that resell for big money than most collabs, but even those prices would’ve been at least 1.5 times what they were right now just a year ago.
As we continue to go along this road, I think resale prices further dip and it becomes much easier for people to buy sneakers after drop dates. It’ll be a better market for buyers just because everyone will have inventory they’re looking to move.
In the grand scheme: The Nikes, Adidas and Pumas of the world will be fine. They are too big to fail at this point. But the aftermarket space for companies both big and small will certainly be impacted in a tremendous way if things continue to dip.
A SPICY TAKE: Adidas becomes the go-to collaborator for luxury brands and designers
The writer continues, “They also restart the Consortium and build a collective of designers, creators, and artists that will create some incredible collabs. (Bad Bunny x Wales Bonner? James Harden x Ivy Park? Fear of God x Pharrell??)”
I like this take. I like this take a lot. But…It feels to me like the ship has sailed on this. It feels a bit dated now. They’ve tried to use some of their athletes with this stuff and the results haven’t really churned out anything meaningful.
Here’s my thing: It’s time for Adidas to go back to its roots. After the Yeezy debacle, they need a reset. It feels like it’s a good time to focus less on influencers and more on making the product they have work.
The reason why they had so little leverage in the Kanye West/Yeezy situation is that they depended on him so heavily to carry their brand.
To avoid putting themselves in that position again, Adidas needs a stronger foundation. It needs people to rock with, say, the Forum 84 like they do with the Nike Dunk.
Before Travis Scott got a Dunk, the Dunk was already popping. Adidas needs that vibe with one of their sneakers, but they’ve never had that. The closest they got to it was the Ultraboost and Kanye even took that over.
So the next step for Adidas shouldn’t be worrying about how it makes its current collaborators pop. It should be building that strong foundation so the company isn’t so reliant on them in the first place.
Has New Balance hit its peak yet? And if not, how much more growth does it have to go?
Y’all know I am a big proponent of the things New Balance has done over the last few years. The brand has evolved into something extremely cool. They’ve leaned in to Black storytelling in a way I don’t think any other brand has.
So what’s next: The brand is just getting started with its reinvention. But the question of how it continues to build is a valid one. There are a few things that come to mind.
The company dominates in collaborations and it’s amazing at storytelling. So keep telling stories. But it needs to continue to diversify those stories. Give us more collaborations with women. Create space for more “other” groups to tell their stories.
Allow the folks who tell those incredible stories more avenues to do so. Give them power. Can they get Joe FreshGoods a creative spot like the one Teddy Santis has, for example.
Then there’s sports. It’s the most popular marketing stage in the world. That’s why Nike is where it is. New Balance is just getting started in that avenue. Basketball has been huge for the company and it’ll almost certainly expand on that.
The end game: Ultimately, New Balance won’t ever get to where a Nike or an Adidas is. That gap is huge and it would take years to fill. But that doesn’t strike me as the company’s goal — it’s private and much smaller than its competitors. We shouldn’t expect that.
But it has completely dominated the niche space it’s in in a way no other brand has. And that’s something the brand can scale if it wants to. I think those steps above are a logical way to do it.
Nike blows copious smoke and doesn't do a dang thing about the bot problem. Misery for regs continues.
I would actually like to take some time to give Nike some credit here. We are all reasonable skeptics about the company’s reported crackdown on botters — it’s been a problem for years and Nike hasn’t done much of anything.
But to be fair it did do some stuff so far. The company blocked a botter from buying a ton of Dunk lows, for example.
The company also showed us their standards for botting so we have something to actually hold them to now. That’s a good thing that we should take as a win.
But as far as misery for us regular folks goes? Buddy, we gon feel that pain anyway. There are just too many of us out here looking for the same kicks!
What are some ways we can better open up the sneaker industry to allow kids access to the latest drops who may not have as many resources (read: money)?
Dog. I’m glad you asked this. Because I’m trying to figure this out too! I had no idea how much kids drops were out here costing y’all.
Obviously, I don’t have any kids. So I don’t feel this pain regularly. But now that I have a niece-in-law in my life I am seeing how batshit insane some of these prices are for these babies. I paid $75 for some baby Jordan 1s! Not even a grade school pair! That’s ridiculous.
The best solution, for now, I guess, is to not really buy hyped kicks for kids. They’re not going to be able to wear them in 6 months, anyway. That’s not really any fun, though.
But the real solution is that brands need to drop prices. Maybe now that we’re in the midst of this dip, they will.
#TheKicksWeWear
A MAILBAG KICKS WE WEAR LETS GOOOOOO
Firs, the homie J Braze popped out in the Chenille Swoosh Dunk highs and these joints look so fly on foot.
The homie Storm came through wavy as ever with these fly Bron 18s.
My dog Waterloo popped out in the holiday spirit with these Dunk 85s. This is a VIBE.
So is what my guy Jimmy gave us with ALL the Christmas kicks. WHEW.
The homie Rhe popped out in the Fire Red 3s and they are CLEAN.
Then the homie Youngboy popped out with the 1906rs and, yup, I gotta cop a pair this weekend.
Then the homie Ric sent us home with A WEEK’S WORTH of heat. My word. The fits are immaculate.
We absolutely love to see it, y’all. SHEESH.
Thank y’all for rocking with me today! Appreciate you! Do y’all want to do more of these? I thoroughly enjoyed this. I think we can make it a monthly thing if y’all want?
Let me know what you think. Until next time, fam. Peace and love. Be easy, be safe, be kind. And we out.
-Sykes 💯