Could high-end sneakers really threaten sports giants?
Luxury fashion brands such as Gucci, Prada, and Balenciaga are opening new avenues in the sneaker market. And when these labels enter the sneaker-game race, that means the world will witness shoes worth thousands of dollars. In addition, could these high-end brands become formidable competitors to major shoe brands such as Nike, Puma or adidas?
Not only high fashion, traditional sports brands also join this "price-raising" game, creating extremely expensive sports shoes on the market. They range from $ 400 to $ 3,000 for a pair of Christian Louboutin sneakers made by leather and crystal, or $ 10,000 for a limited edition of Hu Race Trail (Chanel X Pharrell X adidas) or Nike's Air Jordan 3 Retro DJ Khaled Grateful.
Christian Louboutin's Louis Strass sneakers with Swarovski crystals that costs over $ 3,000.
Why are fashion brands actively involved in the sneaker market?
In the modern fashion era with the fastest growth ever, when people seem to care a lot about common phrases like "streetwear", "streetstyle", "sneakerhead", "hypebeast"..., sports shoes is a potential market for luxury shoe brands. In the heart of Milan, you can find a pair of Nike's Air Jordan 5 Retro limited edition that costs $ 470. And just a few steps to the city's shopping malls, you'll also find Gucci's ACE sneakers made of canvas with the iconic GG logo that costs about $ 520. So, why do high-end brands such as Gucci care about the sneaker market?
Gucci's Flashtrek inspired by the 80's is priced at nearly $ 1,500.
According to Bain & Company, global footwear sales last year rose 10% (3.5 billion euros), 3% higher than the sales of handbag market. Speaking about the growth of the shoe market, men’s fashion director for Neiman Marcus, Bruce Pask says sneakers are no longer just a fashion trend. They have been classified into an indispensable product for any brand.
Besides, Millennial and Z generations (who were born between 1981 and 1995) are expected to gain about 45% of global luxury fashion sales by 2025, according to Bain & Company. Therefore, high-end fashion brands are targeting these groups, especially the Millennials (customers born in the 80's to the mid 90's). They are looking to change the look of the brand to fit Millennials, who are considered to represent one-third of the high fashion market today.
Streetwear fashion style that Gucci created to target the Millennials.
This fact makes the luxury brands not only confront each other but also compete with traditional sports brands. In contrast, sports giants such as Nike, adidas, Puma... also forced to "share" their market with luxury fashion brands such as Gucci, Prada, Versace or Salvatore Ferragamo...
Some of Gucci's promotional images use the lifestyle of Millennials.
In addition, we cannot help but mention the return of Hip Hop culture in high fashion. Rapper are rapidly becoming a new empire of fashion. Hip Hop culture is changing the direction of many brands' designs, resulting in many unique combinations with fashion brands such as "Chain Reaction" by rapper 2 Chainz and Versace, or "Hu Race Trail" by Pharrell Williams along with French fashion house Chanel.
Pharrell, Jay-Z, A$AP Rocky, Kanye West are big names that bring Hip Hop fashion to huge fashion shows.
Are high-end fashion brands affecting the productivity of sports giants?
The emergence of high-end sneakers from luxury fashion brands has turned sneakers into an enchanting product line that is coveted by today's fahionistas. Journalist Jon Caramanica of New York Times once shared that he had been hunting for eight months to get Balenciaga's Triple S sneakers for about $ 900. High-end sneakers from Louis Vuitton and Gucci are also frequently found in urban centers and fashion shows.
A pair of black Triple S from Balenciaga.
But mainstream sports brands such as adidas do not really care about the competition. Kasper Rørsted, CEO of adidas, commented: "The high end and luxury brands are a minuscule part of the market. Take Gucci or Versace or something like that, their market share - and I mean this respectfully - is so small it’s irrelevant."
Meanwhile, Puma CEO Bjørn Gulden has more optimistic outlook. According to Gulden, if high-end fashion corporations decide to follow the sport trend, it is a positive thing that will help pull the sneaker market up.
The revenue from footwear can still affect the income of high-end fashion brands, but to better understand Rørsted's view, we can look at revenues from 403 million pairs of shoes of adidas in 2017, or the fact that Nike has exported more than 1 billion pairs of sneakers in 2018. Therefore, the share that high-end brands occupy in this market is really not a real threat for traditional sports brands.
By: Emma Chavez