Sneakerheads are well-aware of the major players in the sneaker reselling space, a list that includes Stadium Goods, Goat, Flight Club and StockX. But now there’s an up-and-coming (and surprising) source few know about: auction houses.
In June 2016, Los Angeles-based Heritage Auctions staged a collectible sneaker-specific sale — and claims to be the first auctioneer to ever do so — and it was met with enormous success. There was a curated selection of 25 to 50 styles, including Yeezys and Jordans (Heritage partnered with StockX to authenticate every one), but the crown jewel of the bunch was a pair of Nike Mags that sold for a whopping $52,500, setting what Heritage asserts is a world record for the highest-selling collectible pair of sneakers.
“We’ve been selling game-worn or player-signed sneakers for as long as we’ve been selling sports memorabilia, so about 10 years, but this was the first time we’ve sold sneakers that are being collected by people who have an affinity for the design as opposed to the players who have worn them,” said Leon Benrimon, director of modern and contemporary art at Heritage. “We had a really successful first sale, and now we’ve been consistent in selling more.”
Since the inaugural sale, Heritage sets up a sneaker auction biannually as its own section within a greater selection of street art, streetwear and collectible toys, with the goal of prioritizing value over volume, spotlighting high quality, special — and at times, rare — styles (a pair of Pharrell’s Adidas “Human Race” sneakers designed specially for friends and family that went for upwards of $7,000 is one such example). It’s something that Benrimon claims “no one else is doing,” and it’s for this reason he sees no competition with longtime secondary sneaker sites.
“At those secondary sneaker resellers, their system is built around SKUs for certain styles, so if you have a pair that’s unique, there isn’t an option for them on the site —that’s where we’d come in,” Benrimon said. “For the incredibly rare sneaker that’s valued at above $1,000 (80 percent of the marketplace comprises sneakers between $100 and $1,000, with the average price point being $300), that may need extra marketing or an international reach, that’s where an auction house can step in and add value to the existing sneaker resale market, that’s what separates us from the others.”
It’s also important, Benrimon continued, to note the differences between an auction house versus a traditional consignment platform, both for the buyer and the seller. If you’re a seller looking to post a sneaker on a resale site, it’s more of a retail negotiation, where you begin with a desired price and you lower it to meet an offer. At an auction house, it’s the complete opposite — you start at the bottom and work your way up. And if you’re a first-time buyer at an auction, it means educating yourself about the process, like understanding how bidding works, learning the increments, figuring out whether you have to pay sales tax (it varies between states) and knowing you have to pay for shipping.
But an advantage an auction house may have over a secondary reseller for the seller is if it’s an estate situation. That is, if you come into possession of items, the best and fairest way to sell them is through an auction house, where they’ll be sold at market value and there will be a public record. It’s critical, especially when banks or lawyers are involved, said Todd Schireson, vice president of L.A.-based auction house Abell, which held its first sneaker sale in September 2017 on behalf of a major collector — the first sneaker auction to boast a comprehensive catalog with as many as 225 pairs.
With a demographic of buyers who are 40 and older, Abell launched a preview pop-up in the Venice neighborhood in L.A. prior to the auction, showcasing about 100 sneakers, along with modern art and prints, to attract a younger crowd — and it worked. Thousands of potential consumers came in to check out the Nike Air Yeezys (they were the most popular and ended up selling for a little more than $3,000), the Tom Sachs x NikeCraft Mars Yards, the Nike Kobe Aston Martin Pack and more.
“Very few people came for the art; about 95 percent were there to look at the shoes — there was a ton of interest from a younger base,” Schireson said. “For us, it was less about money and more as a means to get the Gen Xers, the millennials, those who may not have grown up going to auctions like the baby boomers.”
Since that 225-item sneaker sale, there hasn’t been another, for a couple of reasons: 1) Abell hasn’t come across another collection in terms of caliber (sneakers that aren’t considered deadstock or “new in box” will see a tremendous dip in price, and it becomes a major headache to disclose conditions if there are any scuffs) and volume (gathering two or three pairs here and there would take too long to put together a sale) and 2) it’s frankly just not worth it.
“For auction houses, it’s all about the bottom line: It’s resources and time versus the money you’re getting out of it. We make money on the sellers’ side, and we charge the buyers a premium as well, and that’s how we make money,” Schireson explained. “We can sell one painting for $200,000, and that’s more lucrative for us than putting together an auction for 200 lots of $500 shoes, where we have to take photos of them all, put together a catalog, list conditions and, in the end, only make $100,000. It’s a lot of work for something that’s not worth it.”
But it was worth using sneakers to lure in new customers, Schireson continues, so he could introduce them to the process (i.e., get them hooked) and, hopefully, have them fall in love with another product like a midcentury chair or painting. To host specialty sneaker sales for profit alone just isn’t cost-effective, and that’s why he doesn’t believe the sneaker reselling business will ever make its way to auction houses like Christie’s or Sotheby’s.
Benrimon disagrees: Sneakers are to millennials is what stamps or comics are to the baby boomers and Gen Xers. And he thinks the demand for collectible sneakers will continue to grow, especially as millennials age and their disposable income increases.
“There’s no doubt in my mind that [the demand] will grow,” Benrimon said, “and I think it’s going to continue to grow in width and depth in the sense that the number of pairs being sold across all spectrums will go up and the desirable sneakers will increase in value.”
As of now, the only problem in the secondary sneaker market, Benrimon muses, is that there isn’t a streamlined marketplace for buyers and sellers. There isn’t a uniform catalog, nor is there a price index and a grading system. Goat and Flight Club helped push it along, but there’s still a ways to go. “It’s still very much a fragmented market,” he said, adding that it will eventually shift away from “on the fly” sales via Facebook and Instagram, and evolve into a more efficient network where both sellers and buyers can thrive — and he believes Heritage can help with that, as it did with streamlining the collectible comic and coin markets, once it aggregates data after establishing itself as “the place” to sell sneakers.
So does he think sneaker reselling is lucrative? And if it is, why haven’t there been more sneaker auctions at other places?
“They will — it’s just a matter of time,” Benrimon said. “We started selling luxury handbags like Hermès, Chanel and Louis Vuitton in the secondary market, and everyone thought we were crazy, that it wasn’t a viable market — and then Christie’s poached our entire bag department to start their own. There’s a three- to five-year lag time, so I’m sure in five years, Sotheby’s will announce their first sneaker auction.”