The experience of visiting a sneaker consignment store in any big American city today is not the same as it was three years ago. There are more items on the shelves. The costs have decreased. The deadstock Air Jordan 1s that were selling at two or three times the retail price in 2021 are priced at levels that the resellers who hoarded them would have thought were unattainable. And others who used to stress over drop dates on the Nike SNKRS app are wearing something completely different, usually a flat leather loafer in a black or cognac color that wouldn’t have looked out of place in a law firm from the 1990s.
Although the sneaker market correction has been developing for some time, it seems more accurate to refer to it as structural rather than cyclical. In an effort to profit from the hype cycle, Nike flooded the market with colorways of its most sought-after styles in the first half of the decade, including the Jordan 1, the Dunk, and the Air Force 1. For a while, it was effective. Then it killed the scarcity that made those shoes valuable, which is what happens when a market is flooded. With forty of them, a Jordan 1 colorway is not uncommon. With a sneaker portfolio, a reseller with three pairs of shoes that are currently trading below retail will not be able to make rent.
It’s difficult to stress how much the bot issue exacerbated the situation. For years, automated purchasing bots that swept inventories in milliseconds routinely defeated actual customers attempting to purchase limited-edition releases at retail via the Nike SNKRS app. Then, in order to obtain what they desired, those customers paid a premium on StockX or GOAT. Under that arrangement, consumers must continue to be enthusiastic about a product that they are regularly unable to purchase at a fair market price while paying a substantial premium for it. The zeal wanes over time. The market’s readiness to cooperate was eventually overwhelmed by the weariness that had built up over those years, as well as proven quality control problems like cheap pleather and glue stains on shoes selling for $150 to $200.
The shift to leather loafers is a result of both intentional and cyclical fashion trends. The Row, Prada, Bottega Veneta, and Miu Miu have all made a significant shift in their runway designs toward low-profile, flat leather styles. The bulky lug sole, which was popular from 2018 to around 2022, has become less popular. However, the adoption of loafers among erstwhile sneakerheads is driven by consumer behavior that extends beyond esthetics to include financial considerations. A person who used to spend $400 on a pair of Nike Dunks—shoes that may lose value, required navigating bots, and carried the risk of secondary market speculation—now frequently spends the same amount on Italian-made leather that will mature with wear as opposed to sitting in a box.
Retailers and communities that keep a close eye on this market believe that the correction represents a true reset in the definition of footwear collecting rather than a brief decline. Even after drastically lowering prices, the proprietor of Hidden Realm, a sneaker store in Placentia, California, has detailed months of ongoing hardship. The customers who drove that store’s business during its busiest years have moved on, not all of them to loafers particularly, but to a different connection with shoes in general. For a generation that saw the investment thesis fail, the notion that a pair of shoes is an investment vehicle has largely lost credibility.
In particular, Nike’s predicament is worth keeping an eye on. Through sincere product innovation and genuine cultural connections—Michael Jordan, the Cortez, the early running category—the brand created exceptional value over decades. The hype period took advantage of that built-up brand equity in ways that undermined the cultural legitimacy upon which it was based. It takes more than just producing another limited colorway to recover from that. Rebuilding the relationship between the product and the wearer necessitates a longer undertaking than what a quarterly inventory correction would imply.
