Tuesday, September 26, 2023

Kanye West-Adidas Yeezy’s Divorce Will Disrupt Sneakers Resale Sites

Must read

Shreya Christinahttps://cafe-madrid.com
Shreya has been with cafe-madrid.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider cafe-madrid.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

Adidas ended its seven-year business partnership with Ye, formerly known as Kanye West, earlier this week after the artist made a series of anti-Semitic comments and wore a “white lives matter” shirt during Paris Fashion Week. Now, the ripple effects of Adidas ceasing production of the popular footwear and apparel brand Yeezy have turned outside the company and into a fast-growing, lucrative and broader sector: the sneaker resale market.

This part of the retail world is where sneakerheads, collectors, and professional resellers buy and sell rare or in-demand shoes through online marketplaces such as StockX, GOAT, and eBay. In recent years, it has grown into an industry worth more than $4 billion in North America alone, with the potential to reach $30 billion globally by 2030, according to research by Cowan. But the problem for the major resale players in the industry is that the market is dominated by only three brands. And one of them is Yeezy.

Nike, Jordan Brand and Yeezy currently account for more than 90 percent of sales in the resale market, Cowan said. And with Adidas this week announcing that it would be disbanding its partnership with Ye and no longer producing or selling Yeezy-branded products, these online businesses looking to fulfill every hypebeast’s desires will suddenly have to look elsewhere to diversify their businesses. to stay loyal. customers often come back to buy them. The hype that comes with new Yeezy releases isn’t what it once was, but the lack of future offerings will likely still leave a huge hole.

“There may be some short-term pop, but I think the Yeezy era could be over,” said Dylan Dittrich, head of research at Altan Insights, which publishes information on collectibles such as sneakers, watches and sports cards.

When Adidas announced on October 25 that it would “discontinue Adidas Yeezy business with immediate effect,” the kibosh eventually instigated a partnership that critics said it should have happened much sooner, the resale platforms that take advantage of Yeezy sneaker and apparel sales had to make a decision. But their answer soon became clear. With the exception of a smaller player in Yeezy’s resale space, The RealReal, the other online marketplaces would continue to offer sellers Yeezy products and buyers buy them. But none of them wanted to talk about that decision. StockX, GOAT and eBay all did not respond to requests for interviews or comment.

The most popular product lists on these sites may explain why. On Thursday, eight of the top 12 bestsellers on StockX were Yeezys, with the site selling thousands of Yeezy Slide sandals in the past three days alone. Dittrich, the head of research at Altan Insights, said the prices of Yeezy Boost 350 V2s, arguably the most recognizable sneaker model in the Yeezy portfolio, jumped between 10 and 30 percent on StockX after Adidas’ announcement. It seemed that fans, collectors and resellers were making a calculated bet that the lack of future Yeezy stock would increase the value of the artist’s existing footwear – regardless of the controversy. Those prices have begun to fall in the days since, but not below their pre-breakup position, Dittrich said.

A product image of a black Yeezy Boost 350 V2 sneaker.

The Yeezy Boost 350 V2

Kola Tytler, who once helped run the Yeezy-centric Yeezy Mafia news site and is the founder of a Milan-based sneaker and streetwear resale store called Dropout, Recode told Recode that resale store owners across Europe are stocking up on popular Yeezy styles this week “because it’s hard to see prices and demand drop significantly despite the controversy.” Visitors to Dropout’s ecommerce site, dropoutmilano.com, have also searched for Yeezy’s at higher rates this week in the past.

That all sounds like a good thing for the shopping sites that cater to sneakerheads’ demand. Increased interest rates and higher prices usually result in a greater drop in revenue for these companies. But what happens if, or when, fewer customers want to attract fashion related to Ye? Or just when the impact of Adidas not making new Yeezy merchandise is felt and supplies are running out?

In announcing the breakup, Adidas said it “is the sole owner of all design rights to existing products, as well as previous and new colorways under the partnership.” Equity analysts said the company plans to produce Yeezy designs under the Adidas brand name. It seems unlikely that those products could have resale value and hype comparable to Yeezy without mentioning Ye’s name or involvement with the product.

“It’s hard for me to see adidas can match YEEZY’s success without Kanye,” Tytler wrote to Recode.

Ye has said that he will be selling new sneaker designs but will need a new partner, which can be a difficult task; he was escorted from Skechers HQ on Wednesday after appearing “without invitation”.

On the other hand, StockX and GOAT, both founded in 2015, have made efforts to diversify from sneakers in recent years, even before the Yeezy fiasco. StockX now has categories for trading cards, collectibles and accessories, in addition to sneakers, shoes and clothing. GOAT is earlier in that journey, with the parent company announcing on October 17 that it planned to acquire Grailed, a resale site more known for non-sneaker fashion. But with both private, venture-backed companies looking forward to potential IPOs, the race to replace Yeezys could be crucial. In the meantime, they take all the sales and profits associated with the brand that they can still get.

More articles

Latest article