HypePlug in early 2021 was tapped in by Sotheby’s to source and curate a selection of sneakers for their Luxury Week Sale out of Paris. On September 22nd 2021, the auction started with 30 sneakers featured alongside the jewellery and bags typical of luxury week.
Pairs from the HypePlug Closet include the Nike SB Low Bernard Buffet and Nike Air Yeezy II Dual Signed by Kanye West, whilst other notable pairs included the Nike Air Force 1 Playstation, Off-White Air Force 1 Samples, and Nike Dunk High Grammy Samples.
This was the first auction featuring sneakers put on by Sotheby’s FR and broke a record. The previous highest recorded public sale was for a Nike FLOM which sold for 63 000 USD last year. HypePlug’s Paris Dunk was sold for a final price of 82 900 EUR which has absolutely set a new precedent.
Sotheby’s also hosted an exhibition for the lots available at their space at 76 Rue du Faubourg Saint-Honoré 75008.
The rare one-of-one prototype of the Yeezy 1 which Kanye West wore during his 2008 Grammy Performance was one of the first times the world was to see the project being cooked up by West and Mark Smith of Nike. The shoe is, as expected, in a US size 12, and shows signs of wear – imperative to its provenance. This prototype in contrast to the retail pairs features an all black leather exterior, a lasered Swoosh on the overlay, and a dual-coloured, stitch-contrasting Jordan 3 sole – which was borrowed for all of the Yeezy 1 sneakers. The pair also comes with a special box, designed and lasered by Mark Smith – Nike design pioneer and partner of West in the design process.
The pair which will be displayed in Hong Kong is being sold in a private sale, with the Sothebys website and app simply tempting buyers to enquire. The $ 1 million valuation has been published by various media companies and organisations – importantly not by Sotheby’s – is not just an arbitrary valuation or marketing ploy, but shows a massive shift in the perceived value of sneakers – which have mainly been intertwined directly with the art world, or directly with Michael Jordan.
This deadly duo – an objectively engaging documentary with a global mass market appeal, combined with a record breaking sale of associated sneakers, propelled a new wave of vintage and ‘1985’ sneakers. Not only was owning a pair of original Jordans owning a share of a cultural genesis, but also an astute investment. A surge in demand for deadstock OG 1985 Jordan 1’s were at an all time high – elusive pairs like headstock Black Toe’s and certain metallic pairs had commanded astronomical prices. The demand increases for those with a greater niche appeal, such as those which are signed, game worn, or both. Globally it is accepted that these are cultural artefacts, and have inherent cultural value – and subsequently somewhat liquid in the open market.
This brings us to today where Sotheby’s has come forth with a record breaking appraisal for property offered in private sale. This would break the precedent of the most expensive sneaker being directly associated with Michael Jordan, and by extension sports memorabilia. This is a bold statement which is a testament to an expanding demographic of probably younger, international clients who have been more exposed to Kanye West independently and individually. Kanye West is a current actor and player in global affairs with an ongoing career – there is still room for him to reinforce his influence on todays culture, as well as imprinting on the cultures of tomorrow. There are very limited ways in which Michael Jordan is going to be able to dramatically shape the price of original Jordan 1’s; Kanye West still has time to cement his legacy – and his unpredictability adds to this.
Kanye West was one of the first artists to bring athletic wear and music formally together through disruptive collaborations. His Nike collaborations are common grails and both hold weight as some of the best sneakers to be released, but this pair is special in its nature of being one-of-one. It is also verified as being worn by Kanye West during an iconic performance – already drawing some comparisons between this pair and the most recent record breaking sale.
Although no sale has been realised, it has already spurred a conversation, and for the most part that is all that’s really required to move markets. Does this instantly raise prices of the original Yeezy 1 & Yeezy 2’s inherently, with the samples, signed, and worn commanding even higher prices? Does this mean that the signed Michael Jordan sneakers are undervalued and previous sale numbers are actually steals? Sotheby’s are one of a few groups at the forefront of this expansion upwards for sneakers, and it is very likely that they will find a new home at the end of the auction.
With tensions consistently escalating between China and the West, China has failed to demonstrate a change in their governance of the Uygur Muslims who have been subject to various ongoing human rights abuses. The criticism aimed at the Chinese government by Western brands, and their joint support for the BCI, has led to their expulsion from government controlled domains.
Dewu, formerly Poizon, is a leading lifestyle and sneaker application in China, operating as a sneaker marketplace and online fashion community. StockX recorded $1.8 billion in gross merchandise value in 2020 whereas Dewu reported $10 billion. In the midst of this crisis, Dewu has stated that it immediately and indefinitely has removed and suspended trading for all Nike products on the application.
Not only has Dewu cut off Nike, but major Chinese personalities and influencers have also distanced themselves and cancelled contracts. According to Yahoo!, Adidas has deals with far more celebrities in China than Nike, and they too have terminated their working relationship with the brand. In addition to Nike and Adidas, other major footwear brands with annulled celebrity endorsements include Converse, Puma, and New Balance. Burberry is also involved through their virtual costume collaboration with Tencent’s “Honor of Kings” video game making it the first luxury brand caught up. All of these brands are aligned with the BCI.
On the other hand, Chinese sportswear giant Anta, which also owns FILA China and Arc’teryx China, announced that it was leaving the BCI following the organisations criticism aimed at the treatment of the regions population who are forced into labour. They maintain that they always have, and always will, use cotton from these regions. China’s Ministry of Commerce said in an official statement that “companies involved should avoid politicising business issues.” Anta Sports and Li Ning shares surged following the news whilst Adidas, Nike, and Inditex fell.
This is only one small sliver of a much larger and deep rooted socio-political issue, but does raise many questions which are left unanswered, and often forgotten about in communities which are even further down and farther removed from the supply chain.
Nike is suing 589 websites, the owners of 676 social media accounts and more than 100 unidentified companies and individuals for allegedly selling counterfeit versions of its Nike and Converse shoes online. Nike described 46 networks with some networks being sued for more than USD$200 million each. What many have taken interest in are the “networks” that Nike have identified; a real cartel scheme with a small group of top level players. Although the lawsuit has slowed down operations, the market has not disappeared and different supply channels will emerge. For Nike and other manufacturers, replica production is a Hydra – each time they cut off one head two more grow.
This lawsuit initially arrived earlier in January in sync with Virgil Abloh’s announcement of “The 20”. This new lawsuit (Case 1:21-cv-00248-SHS) is topped up seeking further damages to restrict supply whether it be through Reddit, Instagram, or their websites. All listed pages have been shut down and statements have been made by large replica sellers on their preferred platforms. It can be assumed that many of the defendants in the case do not reside in the United States so any verdict would have little legal influence – some replica sellers have already reopened up shop whilst others have guaranteed to fulfil orders. As just one of many historic lawsuits, it will not kill a large and growing market.
Fujiwara Hiroshi’s fragment brand recently teased further towards their collaboration with Maserati – the Italian sports car manufacturer.
Having collaborated with brands like Louis Vuitton, BVLGARI, Nike, and Moncler, the fragment brand operated across a wide spectrum of products and offerings – ultimately all embodying the brands ethos and DNA – going beyond streetwear and fashion to the intersections of contemporary art, culture, and lifestyle.
The first look into the Maserati x fragment collaboration came in late 2020 with the Rizzoli published HIROSHI FUJIWARA FRAGMENT #2. This book published various images and prints relating to the then unreleased collaboration.
VF Corporation – owners of Timberland, the North Face, and Vans, have come to an agreement to purchase cult New York skate brand Supreme in a US$2.1 billion cash deal.
James Jebbia – the founder will remain with the brand.
In 2017, the Carlyle Group purchased a 50% stake in Supreme for US$500 million, giving the Supreme brand a total valuation of US$1 billion. The investment initially brought some public scrutiny as the Carlyle Groups’ investment portfolio extended to hardware distributors, and combat fighter jet production groups – a controversial sector for many, but this did not hinder Supreme’s growth. HypeBeast noted that the Carlyle Group strategy often involved 4 – 5 year investments and that Supreme was never intended to be a long-term legacy investment.
This year, VF Corporation will be purchasing the whole Carlyle Group stake, as well as other investors giving Supreme a new valuation, and a stronger connection to brands it already has strong ties to. In recent years Supreme has collaborated with Vans, Timberland, and the North Face, the latter which is perhaps the most iconic. Supreme being brought under new ownership will allow for more collaborations and more dynamism.
Bloomberg also states that VF Corporation expects Supreme to contribute at least US$500 million of revenue to the group, and an increased $0.20 adjusted EPS. The group feels confident with adding Supreme to their roster with the CFO stating that “this is also a consumer space we know quite a bit about, we’ve got about $3 billion in sales already from that street-inspired intersection between active-athletic and streetwear total addressable market. We do know something about that space.”
Founded in 1899, VF Corporation is one of the world’s largest apparel, footwear, and accessories companies connecting people to the lifestyles, activities, and experiences they cherish most through a family of iconic outdoor, active, and workwear brands including Vans, The North Face, Timberland and Dickies. Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet. We connect this purpose with a relentless drive to succeed to create value for all stakeholders and use our company as a force for good. For more information, please visit vfc.com.
In April 1994, Supreme opened its doors on Lafayette Street in downtown Manhattan and became the home of New York City skate culture. At its core was a group of neighborhood kids, New York skaters and local artists who became the store’s staff, crew and customers. While it developed into a downtown institution, Supreme established itself as a brand known for its quality, style, and authenticity. Over 25 years, the Supreme brand has expanded from its New York City origins into a global community
“Themes underpinning this market include digital communities, data, product scarcity, and network effects.”
Sneakers As An Alternative Asset Class, Part II, John Kernan et al.
Over past seasons, we have observed a shift in the cultural perception of streetwear, with many high-end fashion houses adopting new streetwear inspired styles or collaborating with brands already in the field. This is a reflection of the overall consumers downward shift towards more casual looks with an appetite for comfort, exclusivity, and clout. Louis Vuitton collaborating with Supreme, Virgil Abloh’s 2018 appointment as artistic director for menswear at Louis Vuitton following iconic collaborations with Nike, and Dior’s recent collaboration with Air Jordan and Stussy are iconic examples of this change. Although the sneaker resale market is separate from the overall streetwear industry, the two are very much linked.
Mainstream interest in sneakers has also increased across all age groups. Market data suggests positive growth in individual ownership of sneakers, with those owning at least 4 to 5 pairs increasing more than 4% in the period between 2014-2019 globally. Furthermore, the growth of that segment – overtaking that of those who own 4-5 pairs – shows that this is a growing space and indicates further room for growth.
Although brands such as Nike or Adidas do not reap any of the direct revenue benefits from the price premiums on the resale market, they take advantage of the hype created around their products to ensure a continuous increase in demand. With limited releases, brands are marketing their product without spending a dime. The natural consequence of this tactic – unfortunately for customers – is the massive inflation in prices, with some pairs in the resale market often trading anywhere from 100% to 500% of the retail price.
This hype has not been lost in the eyes of institutional investors who have realised the value of the resale market worldwide, estimated to be worth around $6B growing at approximately 15% y/y. Experts suggest the market could be worth nearly $30B in the next 10 years. In fact, the resale market is now expanding at an exponentially faster rate than their retail counterparts. Over the past years, the biggest names in the reselling community have attracted attention and raised large amounts of capital from retail giants, venture capital firms, and luxury groups.
Stockx has raised $160.2MM over the past four years, from notable groups such as Google Ventures, and became the first sneaker reseller to obtain ‘unicorn’ status, meaning a billion dollar valuation. Prior to being acquired by FarFetch for a sum of $250MM, Stadium Goods received approximately $17.1MM from investors, $11.5MM of which came from Luxury giant LVMH, while Grailed has raised approximately $16.5MM from venture capital firms through their Seed and Series A rounds. The GOAT Group also went through various investment rounds prior to their 2018 merger with Flight Club, and most recently received $100MM from Foot Locker.
These stakes are not surprising though. According to a Stockx report, sneaker resale prices rose 6%, while the S&P 500 went down 10% in the period between February and May 2020. In an analysis of Nike’s financial performance, it was revealed that the brand’s stock performed 3 to 4 percentage points above the S&P 500 during 13 high-volatility periods in the last 10 years. While other brands such as Adidas and New Balance have also been experiencing encouraging results, Nike remains the favorite of the sector in investors’ eyes.
Throughout the Covid-19 pandemic, the industry has performed well – better than some other sectors – which serves as an encouraging outlook into the future. The reality is that the resale market depends on the overall success of these brands, and these brands benefit drastically from the resale market in terms of free marketing. As both move increasingly towards digital mediums of sale, it will be interesting to see where things are in the next few years. Regardless of what happens, Hypeplug will be here along the way to give you all the necessary insights.
Warren Lotas sued by Nike for “promoting and selling fakes of coveted Nike Dunks.”
“Warren Lotas’s ‘Dunk’ sneakers are not legitimate customizations, they are illegal fakes.”
“Arnold & Porter filed a trademark lawsuit Wednesday in California Central District Court on behalf of Nike. The suit pursues claims against Warren Lotas and Warren Lotas LLC, over the alleged production, and sale of fake Nike Dunk sneakers. Counsel has not yet appeared for the defendants. The case is 2:20-cv-09431, Nike Inc. v. Lotas et al.” California Central District Court Oct 14, 2020
On September 27, 2020, Warren Lotas announced through his Instagram page that he was taking pre-orders for his Warren Lotas X Staple Pigeon OG.
Nike collaborator Jeff Staple. The original designer and owner of the Pigeon Dunks and pigeon graphic is not named in the suit. despite having worked on the “reinterpretation” with Warren Lotas.
Nike, in its court claim, states that the brand “protects its iconic sneaker designs, and its intellectual property in those designs, by rooting-out bad actors that undermine the DNA of sneaker culture by promoting and selling fakes.”
They make clear in no uncertain terms that Warren Lotas is “one of those bad actors. Promoting and selling fakes of coveted Nike Dunks.” Nike also points to the fact that the sneaker community has been unable to categorize and properly define what Warren Lotas has created – whether they are “legitimate customs or illegal fakes”. They further claim that this confusion is deliberate and is a marketing ploy – by Warren Lotas.
According to The Fashion Law, a “likelihood of confusion among consumers as to the source of a product is important, as it is the critical element in a trademark infringement claim” – one which this claim entails.
Nike is now demanding that the Lotas products are not to be delivered to consumers, as they were sold on a preorder basis, and not recreate a similar product in the future according to the claim. Nike is also demanding all stock be sent to Nike Inc, rather than consumers, in order to be destroyed.
Sotheby’s has officially announced they’re launching a sneaker store – The Sneakers Shop, giving customers across the globe unprecedented access to collection-worthy pieces. According to the auction house, some of the grails that will be featured in the Sneaker Shop include the iconic 1972 Nike Moon Shoe, Michael Jordan game-worn sneakers and more, all part of @shoezeum‘s collection, which he’s been assembling for the past 20 years.
The auction which came to a close in late September 2020, was released with a line-up of some truly unique and historical pieces. A pair of Future Nike Dunk SB High’s were sold fo $63,000USD – the highest amount ever paid for a Nike SB Dunk publicly. A pair of original DS 1985 Breds, ‘What The Dunks”, and a signed Jeff Staple Pigeon dunk – there really were some pairs for the collectors. Find below the 8 items that were sold with images and product descriptions provided by Sotheby’s.