Sneaker peak: A Sotheby’s fashion show in Hong Kong features a pair of Kanye West’s Nike Air Yeezy 1 sneakers which later sold for $1.8 million © REUTERS

Over the past two years, auction prices for particularly rare pairs of sneakers have skyrocketed. As with comic books and baseball cards, the most sought-after examples have now become collectibles that sell for millions.

A 1985 pre-production sample of Nike’s first shoe for former NBA basketball star Michael Jordan sold at auction for $560,000 in 2020, around four times the estimate and a new record for sneakers. That record has since been broken, twice – most recently last year, with the sale of another very rare pair: a prototype Nike Air Yeezy 1, worn by rapper Kanye West on stage at the 2008 Grammy Awards. They left for $1.8 million.

What is behind this price spike? Brahm Wachter, US head of streetwear and modern collectibles at auction house Sotheby’s, which organized both sales, said the sums represented the maturing of a new generation of buyers. For them, the sneaker is as powerful a cultural symbol as baseball cards were in the early 1990s, when prices for particularly rare specimens, such as the T206 Honus Wagner, soared (one example fetched 6 .6 million last year).

“If you’re a kid and you go to the deli and buy a comic book for 5 cents and then 30 years later you’ve had huge success in your business career and you want to have that feeling of nostalgia, that who is important to you?” asks Wachter. “It could be Superman, number one. With sneakers, you have a lot of people growing up in the 1980s remembering Michael Jordan walking the court. As more and more members of this generation succeed, it is the cultural assets that they value. »

Brahm Wachter of Sotheby's standing in front of a stack of shoeboxes

Cool box: sneakers are as powerful a cultural symbol as baseball cards were in the early 1990s, says Sotheby’s Brahm Wachter © Pascal Perich

While, to some, almost $2 million for a pair of old shoes may seem like an absurd price, rare sneakers have the two ingredients needed to turn a consumer good into a treasured collectible: cultural significance and a scarcity. The holy grail of sneaker collection – the types that make six or seven figures – are models that only come in handfuls, or are single examples. These are prototypes and samples, usually decades old, and extremely hard to find in good condition. “Two years ago, it would have been rare to see a pair of sneakers go into six figures,” says Wachter. “Now it happens all the time – globally, probably every two weeks.”

The record-breaking Air Yeezy prototype was owned by Ryan Chang, a Brooklyn-based collector who runs Applied Arts, an advisory firm that advises investors on alternative assets, such as sneakers, sports cards and non-fungible tokens. He says the Air Yeezy deal and others have brought him new business with customers who aren’t necessarily sneaker enthusiasts, but who see an investment opportunity.

“A lot of them don’t have any experience with sneakers — maybe they just own the sneakers they wear when they run in the morning,” Chang says. “They are knowledgeable investors. They are a combination of fund managers, private offices and successful people who have been visionaries in the past, who have been able to take advantage of financial opportunities many times in their careers, and they see this as the next.

Michael Jordan’s 1985 Air Force 1 shoe sold at auction for $560,000 in 2020, around four times the estimate © NBAE via Getty Images

Kanye West in the Nike Air Yeezy 1s prototype at the 2008 Grammys

Kanye West in the Nike Air Yeezy 1 prototype at the 2008 Grammys © AFP via Getty Images

He says investors come to him to diversify their portfolios by reallocating a tiny portion of them to collectibles. This can have a disproportionate effect on the sneaker market. “I actually can’t find enough things to buy for the amount of money people want to deploy,” Chang says.

While the sneaker market is currently white-hot, prices are mostly driven by shared beliefs about cultural value, making them vulnerable to downturns if sentiment changes. Collectibles can drop in price, as in the case of Beanie Babies – soft toys that traded for thousands of dollars in the 1990s. Collecting sneakers also comes with practical costs – secure storage, authentication, insurance, shipping, cleaning and restoration – that buying stock in a sneaker company such as Nike or Adidas does not.

However, there are no signs of the sneaker’s popularity waning. A February Sotheby’s auction of a Nike-Louis Vuitton collaboration designed by Virgil Abloh – 200 pairs in the sportswear brand’s classic Air Force 1 silhouette – generated total sales of $25.3 million, each pair fetching at least $100,000. The sale came shortly after the sudden passing of Abloh, creative director of Louis Vuitton menswear and frequent Nike collaborator, who had a huge influence on the sneaker as an object of desire and increasing value. “The most interesting thing was the depth of the market,” says Wachter. “A lot of lots had 30, 40, 50 bids.”

Virgil Abloh's Louis Vuitton-Nike Air Force 1

Sales of a Nike-Louis Vuitton shoe topped $25 million

Nike Air Jordan 1s

The Nike Air Jordan 1s that set an auction record in 2020, which has since been broken twice

Most of the buyers were under 40, suggesting that the sneaker’s popularity is likely to endure. “You see a whole generation whose interest in investing and alternative assets is evolving,” says Garry Thaniel, managing director of sneakers at online auction platform eBay, where a pair of sneakers is sold every four seconds. . “We still have a lot of people in high schools running businesses based on generating income from sneakers. While an older generation may have only seen the stock market [or] the art market as a means of investing, you already see a whole generation of young people who see that in sneakers.

As for the higher echelons of the market, those like Chang – as much an enthusiast as an investor – are always on the hunt for the next rarest pair. “There’s actually a Jordan prototype from 1984,” he notes. “Not many people knew that the Air Jordan 1 was not a 1985 production – it started production in 1984 as the Black Toe. There is a prototype. I would consider this one to be an extremely valuable shoe.

This article is part of FT Wealtha section offering in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investing