Prior store manager Jack Hulbert with a Jordan 1 retro high sneaker. Photo / Dean Purcell
Buy rare, buy smart and enjoy the profit. That's the mantra of those who know what they're doing in the collectible market. Jane Phare talks to experts who make good money from reselling streetwear sneakers and Rolex watches.
Buying a pair of sneakers for my son's 15th birthday turned into one of the most bewildering shopping experiences I've ever had.
After the teenager declared the shops at Auckland's Commercial Bay were "for old people", we headed to High St to look for cool gear. And gasp! There on the shelf of streetwear store Prior was a prize - a size 11 Air Jordan 1, a retro sneaker styled on those worn by MBA superstar Michael Jordan.
The price was an outrageous $350 but, hey, his May birthday passed without fanfare during lockdown. So I relented.
But when I went to pay I noticed a $180 price sticker on the box. "Yes, that was the original price," the shop assistant explained patiently as though I was the only human left who didn't know that rare Nikes just keep going up in price.
Then he frowned. "Actually this pair is on consignment so they're $369." He went out the back to get the size 11s that were $350. These were the store's own.
The ones on consignment were for sale on behalf of a client, a hustler who was reselling his pair of size 11s for a higher price. Turns out the RRP is in fact the RSP – the Recommended Starting Point.
And so it goes. Sit in Prior for half an hour and you'll see a stream of "sneakerheads" arrive, mostly young men. They're either looking to buy or they're carefully carrying cash-in-a-shoe-box offerings. Store manager Jack Hulbert and his staff are sneaker aficionados; they instantly know what's in the box and what it's worth.
These men are hustling. They have rare items to sell and they know they're going to get more than they paid for them. Some want payment on the spot, others co-sign with the store to sell on consignment for a higher price.
They buy and sell constantly, gradually building up enough money to own the pair of Nikes or Yeezys they've long lusted after. Others are university students who want to earn a bit of money.
They'll queue up outside Nike Britomart, or Foot Locker or the adidas store in Queen St, hoping to be able to get their hands on a new release – a pair of Kanye West Yeezys. Or a pair of lime-green retro sneakers, inspired by American rock band Grateful Dead, or a pair of Off-White/Nike sneakers designed by streetwear designer Virgil Abloh, Louis Vuitton's artistic director for menswear.
Some sneakers are bought overseas or online, after getting lucky in a limited-edition lottery that millions will enter. Prior has a rare pair of Jordan 1 retro low Dior sneakers locked in a glass counter, the Nike Swoosh embossed with the Dior pattern. Just 4700 pairs were sold worldwide and none came to New Zealand.
The Diors were brought into the country by a Singapore-based "plug", one of a network of buyers who buy and sell on behalf. Covid's made it a little more difficult because social distancing means line-ups outside shops overseas can't happen.
Buyers buy expensive automated "bots" to try to jump the lottery queues, the bot-cost quickly paid off with the profit from reselling the sneakers.
Hulbert is reluctant to talk prices because of security concerns but let's just say there are shoes in his store that are worth thousands of dollars. When Prior closes each night, large steel grills are pulled across the store front. It's not only the value of the stock, it's the fact that much of it can't be replaced.
Each sneaker on display is shrink-wrapped with plastic, protected from sticky-fingered window shoppers.
Hulbert: "We get a lot of people in here who've never seen these shoes in real life and the first thing they want to do is touch it."
Even the designer T-shirts - "hype beast" brands like Drew House, Ambush and Vlone - are covered in plastic sleeves.
The trying on of sneakers also involves plastic. Buyers slip on coverings over their socks and they must stand still on a plastic mat in case walking around creases the shoe.
Keep them for a while and keep them perfect, and they'll be worth more than the buy price, in some cases two or three times more. Hulbert recalls a pair of Nike Dunks, an affordable sneaker at $170. But because such small numbers were released around the world the on-sell price shot up to $2000.
It's a business driven by social media and what's trending online. If a celebrity steps out in a particular shoe, everybody wants it and the price skyrockets.
Nike has been cleverly collaborating with high-profile sports stars, rappers and hip hop artists like Travis Scott, sharing its swoosh to create unique merchandise for sneakerheads who can't get enough.
Sneaker collectors make elaborate YouTube videos, talking fans through their collection of hundreds of shoes, displayed in designated sneaker rooms.
Fans use sneaker cook groups (resell groups), Instagram, Facebook pages for streetwear communities, the websites of shoe stores and word of mouth to find out about new releases. Sometimes a store will do a "shock drop" of a new release with little warning.
There's also good money in pre-worn sneakers but the real value comes with the shoe's provenance. Earlier this year a pair of Air Jordan 1s, worn and signed by Michael Jordan, sold for US$560,000 (NZ$840,000) at Sotheby's. The Jordan Netflix documentary The Last Dance that screened this year drove a surge of Air Jordans business at Prior.
Watches worn by a celebrity are much the same. American actor Paul Newman's 1968 Rolex Daytona, a gift from his wife, actress Joanne Woodward, sold for US$17.75 million three years ago.
Watch dealer Marcus Alexander, who runs About Time in Remuera with his wife Rebecca, says both rarity and provenance will drive up the second-hand prices of watches.
"See this?" he says, showing a stainless steel Rolex Daytona with a stop-watch mechanism popular with Formula One drivers. It was bought new two years ago from a Rolex-approved jeweller for $19,800. Alexander has just sold it to a New Zealand client for $40,000. Even at that price, the demand is high simply because Rolex limits supply of its high-end watches.
Buyers can wait years to get their hands on a particular watch from a jeweller with an agency. Because they're rare, the watch's onsell price goes up almost immediately.
The Daytonas are the "Holy Grail" of collectible watches, Alexander says. He'd like to get his hands on a 1990 Rolex Daytona, a watch he used to be able to buy for $2000.
"I would have a customer for that today at $100,000." He's seen them sell for twice that depending on the provenance.
"No one can walk into a Rolex retailer anywhere in the world and buy a Daytona. They are too rare."
Alexander has worked in the watch business in New Zealand, Australia and Switzerland for almost 40 years. He and Rebecca opened About Time two and a half years ago and since then the retail side of used watches has taken off.
"We struggle to find stock, not to sell it."
Their client base are mainly New Zealand men. They like good watches and often own several.
Just about everything Rolex makes eventually increases in value, he says. Anything from a few weeks old to 20 years old will sell at a profit.
He's wearing a 1972 Rolex which would have cost the original owner about $360 back then. Now it's worth around $12,000.
Back in 2008 Alexander sold a rare Rolex Sea-Dweller dive watch for $170,000.
"If someone bought a new Rolex Submariner today and paid $14,500 for it, you could come to us and make a sizeable profit."
"The demand is so high that some watches sell at a 100 per cent premium."
Alexander noticed second-hand watches, particularly Rolexes, starting to increase in value in the 90s. He ran a full-page advertisement in the Melbourne Age and arrived at his shop the next morning to find 20 people waiting outside.
His methods haven't changed much since then. He still runs full-page advertisements, looking for collectible and vintage brands like Rolex, Longines, Cartier, Panerai, Breitling, Patek Philippe and Omega sports.
So far he's had no clients wanting to resell their watches due to Covid hardship, nor does he see any fakes.
"We do lots of repairs and servicing. We don't get people bringing in fakes. They'd rather have the real thing or not have it."
Lisa Stewart, head of Trade Me's Marketplace, says sales of second-hand watches are growing each year and second-hand shoes have jumped by 49 per cent in the past year.
At any one time, 1.2 million second-hand items are for sale.
"Kiwis aren't snobs about buying second-hand items with 76 per cent having bought a used item in the last six months."
Statistics New Zealand figures show sales from antique and second-hand shops turned over $320m last year, up from $299m in 2018, with tens of millions more bought and sold online.
Westpac's conduct affected a total of 24,621 customers.