A new strain of the Coronavirus disease (COVID-19) has been running rampant over the past few months and global confirmed cases of the virus have reached over 320,000. This highly contagious virus has a fatality rate around thirty times that of the common flu and is sending the world into a tailspin of chaos. Stock markets are crashing, countries are entering lock-downs, businesses are closing, sports events are cancelled, schools are transitioning to e-learning, and people are hoarding toilet paper. These are the major things that come to mind when thinking about the effects of this pandemic; however, it is impacting much more.
During a time of crisis, the general public changes its priorities, and the consumption of inessential goods is typically the first thing to be pushed aside. Currently, unemployment rates are skyrocketing and those who remain employed face uncertainty. Along with this, many individuals will not be able to leave their homes for an extended period of time per state requirement. As a result, people are becoming concerned about having enough food and being able to pay their bills. A large portion of those who previously put aside a portion of their paycheck for shopping each month are turning towards saving instead. Additionally, stores all around the world are temporarily shutting their doors and shipments are being delayed. All together, these factors are contributing to the current decline in streetwear resale profitability.
Two weeks ago, Supreme collaborated with The North Face and released a collection that included gloves, shirts, jackets, fleeces, and masks. Under normal circumstances, such a release would have generated a fair amount of hype, leading to sizable profits; however, we are not currently living under normal circumstances. In parallel with slow sell-out times, some items remained in stock for days after the release. The majority of pieces in the collection are barely going for more than their original prices, and some colorways are even selling for less than retail. When looking at this scenario, you must take into account factors such as initial retail price and look at trends of similar items from the past. The jackets did have an abnormally high retail price of $698, deterring both those seeking to buy it for themselves and those seeking to resell. This ultimately created a decrease in demand. Nevertheless, upon examining the resale trends of previous The North Face x Supreme jackets, you can see that nearly all of them sell for hundreds over retail. This recent release goes to show that even hypebeasts are being conservative with their funds.
Similarly in the world of sneakers, Yeezys, Jordans, Air Maxes, and Dunks are all taking hits in profitability. The last three pairs of Yeezys – 380 Mist, 350 V2 Cinder, and 350 V2 Sage – are going for no more than $50 over their initial prices, with the Mists being sold for less than retail in some sizes. There has been a downward trend in profitability of reselling Yeezys recently, yet it is still surprising see the second colorway of a new model selling for so low. The Nike Air Max 90 Reverse Duck Camo is a reiteration of the original highly coveted Air Max 90 Atmos Duck Camo. While this new model is currently on StockX for around $200, its predecessor has sold for as much as $1100. Lastly, the Nike SB Kentucky and Syracuse Dunks, with retail prices of $100 each, are selling for nearly $250. The margins after fees from marketplaces are not necessarily meager, yet I believe they would have been much larger if it weren’t for the Coronavirus pandemic.
There is also something to be said for the fact that all of these sneakers still sold out. Although a lot of people are being more frugal with their savings, shopping continues to serve as a distraction; it enables the consumer to take their mind off of what is going on in the world and be excited about getting something new. As long people have money to spend and are looking to distract themselves, they will keep shopping. However, only one of those factors may apply after a few months of quarantine.