November 9, 2019 |
It’s 2019 and you’re in your mid-twenties. Buying a property isn’t really an option because, well, they’re too expensive and you’ve not got enough for a deposit. Investing in stocks and shares isn’t either, mostly because none of your friends are City bankers. They are all fellow creatives – poor, property-less and sometimes even hungry. But flawlessly dressed, of course. Were all of you wrong to choose your passion over a sensible job? Was developing an interest and thereby knowledge of fashion a mistake? While your mum might nod her head, there’s a whole new generation of entrepreneurs proving that knowing a thing or two about shoes can be quite lucrative.
On a recent morning commute to Ten Towers, I chose not to cycle (sometimes you have to be part of the real world instead of listening to a podcast and actively avoiding human interaction), and as I sashayed down Carnaby Street, thinking about the latest episode of Killing Eve, I suddenly noticed a mass of people ahead of me. Was there a sample sale I hadn’t heard about? Were flash mobs having a comeback? No, it was a group of predominantly rowdy teens anxiously queuing outside the Size? store. “Sorry, could you tell me what’s happening?” I asked one of the boys waiting with a group of his friends. “The new Yeezy is dropping today,” he replied with a soft eye roll. A quick Google as soon as I got to my desk revealed everything: it was the Yeezy Boost 350 V2 in all black.
Just a few hours later, I searched the shoe again to find it was already up online, selling for three times its original price of £180. While it sold out in seconds via Size? and Adidas’s own website, it was – and still is – being resold via StockX, the e-tail platform and business phenomenon defined as “the stock market of things” that is supporting the drop-culture-infused fashion revolution. When people want things, they want them now, and they’re willing to pay for them. Quantifying desire as a financial instrument, StockX treats trainers and streetwear the same way the stock market treats stocks and bonds. “We didn’t make any of this up, all we did was copy the way the stock market works, which has been most efficient for commerce for over 200 years. We pointed it from old commodities like stocks and bonds and oil and gas, to new commodities like sneakers and streetwear and watches and handbags,” says Josh Luber, co-founder and ex-CEO of StockX, and one of the billion-dollar brains behind the financial success of the streetwear explosion. This past June, StockX was valued at more than $1 billion, joining the likes of Airbnb and WeWork as a unicorn company (a privately owned start-up business whose value has passed this financial milestone).
It all kicked off in 2012, when Luber, then working as a strategy consultant at IBM, decided to take his personal hobby of trainer collecting and create Campless, a digital price database for trainers. Several years later, businessmen Dan Gilbert (the owner of the NBA team the Cleveland Cavaliers) and Greg Schwartz became interested in venturing into the resale space. “All the research they had been doing around the sneaker market was really coming back to Campless and all the work we were doing there in quantifying the market and becoming a sneaker-data company,” Luber explains over the phone. “We could look at someone’s entire sneaker collection the same way you’d look at a stock portfolio and track its value over time.” What they did was take all the data from Campless and turn it into a marketplace, with StockX officially launching in February 2016 in Detroit and quickly distinguishing itself as an expert platform dedicated to reselling streetwear.
Nike Air Mag Back To The Future BTTF (2016)
The success of StockX lies in its simplification of the stock-exchange model. Even if, like me, you still don’t understand the explanation of bank bonds delivered by Margot Robbie as she sat in a bubble bath in The Big Short, the resale platform allows you to track the value of every trainer imaginable through graphs but is formatted so you can search on it like you would on Matches or Mr. Porter. “We’ve created this experience where it’s as easy to buy a pair of shoes from StockX as it is to buy a pair on Footlocker.” That’s Luber once again explaining the format. Anyone can buy and sell on StockX. If you’re wanting to flip your pair of new, pristine condition trainers, you can simply register, create a listing and set a price or just sell immediately to the highest bidder. Reflecting how the stock market works, as the popularity of a pair of trainers increases and their availability decreases, so their value rises. The website also stocks clothing, accessories and objects, but it definitely specialises in kicks.
The unique aspects differentiating it from a marketplace like eBay is the niche-interest field and the fact that each of the sales is transparent to the audience. You can see how much the last pair of the same trainers you are interested in was sold for, as well as track their popularity through time. Instead of a “buy” button, there’s Highest Bid and Lowest Ask, giving both the buyers and sellers a clear idea of the value of an item. And unlike Depop, there is very little editorial content, as StockX mostly focuses on the business concept, both visually through the design of the website and via the output of their social media accounts. There’s also the fact that both the buyer and seller are protected in this process, as StockX and their 900 company members globally serve as mediators. And before each item arrives with the lucky shopper, it has been checked and authenticated at one of the company’s global offices by the experts they employ and educate in the field.
One of the reassuring aspects about the level of expertise these individuals hold is the passion each of them has for what they’re dealing with. Luber himself started collecting trainers in 2000; his first were a pair of Jordans – the Air Jordan 11 Concord, which at the time of writing were going for about £500 on StockX. “They are pretty beat but I still have them,” he says. Armin Helfenbein and Matt Miller are top authenticators in the StockX London offices. They are also both “power sellers”, to use StockX’s term, and followed a similar path to the positions they now hold at the company: while working in secure jobs, they realised how profitable a hobby collecting trainers could be, relying on StockX to flip their own. When the company opened their European HQ in London last autumn (their first office outside the US), they were both scouted by the company, the founders being switched on to the fact that looking within their own community would help make the business as successful as possible. It’s probably why their offices are less The Wolf of Wall Street and more The Social Network.
Josh Luber, co-founder of StockX
The big question that comes up when looking at the streetwear market from the outside is how long can value be increased before it comes crashing down? Some experts have deemed the value of the hottest trainers to have increased at a higher rate than gold has in the same time since they were released. “Every year I tell myself there’s no longevity in selling shoes for higher than their retail value,” Helfenbein tells me. “I’ve been telling myself this from 2012, when I started, but every year it continues to get bigger and bigger. A lot of brands like Nike and Adidas are very reliant on collaborations with big musicians and upcoming designer brands, and that’s what’s keeping it all alive.” And it’s true – the fashion cycle continues, with new trainers being made and released daily, making it incredibly lucrative for all those involved – the brands, the celebrities, the resellers.
At the time of writing, the most expensive trainers ever sold on StockX were a pair of Nike Air Mag Back to the Futures from 2016. They were sold for the equivalent of £26,500, but if you wanted to get your hands on them now, you would have to raise about £43,000. Marty McFly would be one rich man. Unsurprisingly, the list of the top five most-purchased trainers on the website are all different colour variations of the Adi das Yeezy Boost 350 V2. While a big part of the StockX appeal is selling trainers above their original retail value, it’s also a place where you can find shoes from the past that you can’t buy in-store anymore. Luber’s own latest buy was a pair of Nike Hyperdunks from 2010 – “It was just a random shoe, but I got it for less than what it was for retail.”
When I ask him about streetwear becoming such a big part of mainstream fashion he credits the likes of Virgil Abloh and Kanye West, as well as the big Instagram boom of 2012, when Facebook acquired the company. “All sneakerheads ever wanted to do was show off their shoes and see what other people were wearing,” Luber says. “That’s what StockX is about – it’s just about access.” Access at a certain price, that is.
Ben Baller x StockX
Less than four years since its launch, StockX is growing without any sign of stopping. What Luber sees as tomorrow is further merging of the retail and resale markets. The global retail market for sneakers is currently estimated to be around the $100-billion mark, while resale is projected to hit $6 billion within the next six years. That’s a lot of trainers being bought, which indicates even more opportunities to narrow the gap between the two markets. Luber also sees StockX expanding geographically – they already have a team on the ground in Japan, and the Chinese market is booming, with the demand for trainers there massive (once again due to the lack of accessibility). However, the most exciting part for the CEO is working with brands on developing unique product that can only be found on StockX, thereby changing the way the business works. The company tried this out first with the LA jeweller Ben Baller, who is best known for his custom-made diamond pieces for Drake and has even been name-checked in an A$AP Ferg track. Using the technique of a blind Dutch auction, StockX received more than 10,000 bids on 800 slides and then sold the black slides for an average clearing price of $181 and the red at $260. Sorry, just imagine me naked in a bath with a glass of champagne explaining it – perhaps it will make more sense.
Even after talking extensively to Luber, Helfenbein and Miller, I can’t say I understand the ways a stock market works. But what all these men prove is that, with or without a business degree, there is a lot of money to be made in this world. Whether you consider it easy money or a return on long hours of research, it’s totally up to you. StockX has not only changed the way the business of shopping works, it has also finally given me a good reason to queue. And, just like that, I became a bit more British.
Taken from Issue 50 of 10 Men – BOYHOOD, MAN, EVOLVE – on newsstands now.
