May 15, 2018

Footwear - Luxury-Label Sneaker Pricing Keeps Rising

1913 HK, ADS GR, KER FP, LVMUY, MC FP, NKE
By Lois Sakany
European luxury labels have jumped all over the sneaker trend this spring, releasing multiple high-priced silhouettes, indicating trends for the category remain robust.

The popularity of sneakers as a lifestyle item show no signs of abating, as indicated by multiple luxury labels that have jumped on the trend through their own high-priced versions of athletic footwear. Following the "dad shoe" look started by Kering S.A.'s Balenciaga's Triple S sneaker, multiple labels are now offerings similar iterations. 

The Triple S not only kicked off a silhouette trend, but the intense demand for the shoe even with a $895 sticker also created a pricing trend. This year, Prada S.p.A. launched its well-received Cloudbust sneaker that sells for $690, an amount that can be viewed as entry-level pricing within the category. 

Luxury labels LVMH Moët Hennessy Louis Vuitton S.A.'s Louis Vuitton launched a women's Archlight sneaker priced at $1,090 in February, and Gianni Versace S.p.A. followed up with its Chain Reaction sneaker priced at $995. Valentino S.p.A. also has a full line up of embroidered men's and women's sneakers, priced as high as $1,295.  

Not to be outdone, Kering's Gucci, a label known for its everything-is-everything design aesthetic, recently rolled out a bejeweled sneaker made in collaboration with Sega Sammy Holdings Inc. and priced at $1,650 for women and $1,750 for men. The shoe will soon be available through invitation-only pre order. 

The labels have taken a varied approach to selling their products. Balenciaga, Prada and Valentino sell through direct channels as well as top-tier wholesale accounts. Louis Vuitton's shoe is only available to purchase at its physical stores. Versace's shoe was available on its online store and in its brick-and-mortar location in the SoHo neighborhood of New York. On the launch day, the shoe was also available through Culver, City-based 1661 Inc.'s GOAT.com, a site for buying and selling coveted sneakers. 

Released in limited quantities, sell-through for the aforementioned silhouettes has been strong and many colorways are sold out and being sold at a premium on resell sites. 

While demand for luxury sneakers by a handful of brands has been very strong with seemingly no ceiling on price, authentic brands like Adidas AG and Nike Inc. have taken a cautious approach to raising prices. Just last year, Nike was forced to lower pricing on multiple basketball models because of a slowdown in demand. However, based on luxury sneaker trends it appears there is room for both brands to begin to raise prices, at least on their high-profile limited edition launches.

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