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Just Don't Do It
Nike's struggles could scuff the sneaker market's future.
Welcome to Alts & Ends, your lively guide to collectible market happenings. In this edition, we examine the fallout on the sneaker market from Nike’s struggles and a massive week in book and manuscript sales.
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Just Don’t Do It
Picture the Nike Swoosh. Now turn it upside down in your mind.
What you’re picturing closely resembles the price chart for Nike stock following the company’s Q4 earnings report. While challenges facing the sneaker market may be felt most acutely in Beaverton, Oregon, the ramifications of those challenges spread much further than Nike’s campus.
More pain on the horizon. Nike stock fell 20% on Friday after the company reported uninspiring earnings on Thursday afternoon. Weighing heaviest on shares was the company’s reduction in guidance for the year ahead, nodding to expectations of further softness. Management now expects a mid-single-digit percentage decline in 2025 revenues; previous guidance called for annual revenue growth.
What changed, and why does it matter for collectors? At the heart of Nike’s challenges this quarter were struggles in lifestyle. We’ve previously covered Nike’s reliance on retro models through the market's peak and afterward. The overreliance on cash cows created consumer fatigue with significant knock-on effects: consumers no longer buy at full price with urgency, products fail to sell out, and cash flow generation slows.
Management recognized this fatigue and consequently telegraphed plans to reduce supply in leading, classic franchises (think: Jordan 1, Nike Dunk, Air Force 1). However, Q4's incremental softness inspired an acceleration of those plans, which will weigh on the business in 2025.
Translation: the market has grown saturated with Jordans and Dunks, consumer demand is falling, and Nike is taking expedited steps to reset the market at the expense of its revenues in the short term.
What’s next? Nike executives have recently spoken at length about a pressing need for innovation, led by sport but mirrored in lifestyle. In addition to new product innovation, the company will draw on its unparalleled vault of classic products to make what’s old new again - to anoint new classics as the it-shoes of the moment.
They’ve done it before: the Dunk represented 0% of Nike revenues in fiscal 2019 before becoming arguably the most popular sneaker on the market in the following years. The strategy started with collaborations and limited releases that created the market’s hottest resale opportunities.
Troubling retros and rumors. Given the circumstances, one might expect the brand to reintroduce or reinvent models we haven’t seen much of over the last few years, not to lean on more of the same. To create new energy, not to further dilute and devalue the models that have done so much heavy lifting.
It was confusing, then, to see rumors spread across social media over the weekend about upcoming releases that reside in the latter camp. Rumors suggest that the Undefeated Jordan IV, a grail of near-mythical proportions, will receive a retro release next year. More opaque theories forecast a re-release of Off-White’s “THE TEN” in the next few years.
But one upcoming retro doesn’t seem to be a rumor at all, as Nike’s accounts teased the impending return of the Wu-Tang Dunk. The shoe was created in 1999 to build energy for the “Iowa” colorway of the Nike Dunk High - it wasn’t released to the general public, and only 36 pairs are thought to exist.
What’s the problem? Isn’t it a good thing that today's consumers might have a chance to purchase these grails of sneaker lore?
Of course! But also…it’s complicated.
Some of the appeal and mythology around Nike lifestyle sneakers is derived from these legendary releases and their verging-on-endangered scarcity. The idea that a shoe could be so coveted created a valuable halo effect for more accessible products sharing aesthetic similarities.
Re-releasing the real thing dilutes that power - and Nike’s current predicament can be traced in many ways to a dilution of the brand’s coveted products through oversaturation of the market. Diluting the brand’s most powerful stories from the vault to solve a problem caused by broader dilution is confounding.
But given sneaker lead times, these plans were likely laid more than a year ago. The likelihood is they’re not viewed as solutions to the current problem. Fair or not though, due to the timing of the earnings report late last week and the rumors this weekend, the potential releases reek not of fresh sneakers but of desperation.
A threat to the emerging high-end. Sneakers like the Wu-Tang Dunk and the Undefeated Jordan IV form the foundation for relatively newfangled sneaker auctions at high-end auction houses. The Undefeateds have sold for as much as $44,100 and commonly trade for over $20,000. The Wu-Tang Dunk has attained similar levels on the rare occasions of its sale.
Their value came not just from their rich stories and their incredible scarcity, but from the apparent unlikelihood that Nike would ever re-release them. These pairs were the only ones that would ever exist.
But what happens when they do re-release?
There’s no replacing the OG, but this isn’t akin to a reprint of, say, the 1952 Topps Mantle, where the new product has no material impact whatsoever on the original print. For example: Atmos delivered coveted Air Max 1 collaborations in the early 2000s: the “Animal Pack” and the “Elephant.” The values of both cratered with 2016 and 2017 retro releases. Those are merely two examples; it’s not unthinkable that the original releases could instead be boosted in notoriety by the re-telling of their stories to new audiences.
Still, the belief was that sneakers like these would never return - their status was so mythological that Nike would never dare reissue them and risk their treasured reputation. But if they can be retro’d, almost any sneaker can be. That realization poses a significant threat to the urgency of demand and to values. No mo’ FOMO.
In a hypothetical environment where Nike can and will retro anything, the scarcity of any issue will be viewed only as temporary. That affects not just the most elevated grails of the space but the entire market for scarce sneakers. If they’ll touch the untouchable, surely they wouldn’t hesitate to revisit the coveted releases of today, and perhaps in just 4-5 years instead of 20-25.
What to watch? The sky isn’t falling, at least not yet. Many unanswered questions linger that will shape the market going forward:
Will these rumored releases materialize into actual releases?
If they do, will they be identical to their predecessors or near enough to serve as viable substitutes?
Will the quantities released even come close to making a perceptible dent in the overwhelming surplus of demand relative to supply?
If the answer to any of these questions is no, then the negative market impact will be negligible, at least in the near term. Longer term, the market will take its shape based on Nike’s awareness that further reliance on its tiring franchises - this time on its holiest grails - can’t sustainably solve its problems.
The risk is far larger than the reward.
Photo: Sotheby’s
Priceless Pages
It should be no surprise when a rare book or manuscript fetches seven figures at auction. Mirroring the dynamics of the art market, this rapidly appreciating niche boasts a diverse range of offerings and a deep pool of buyers.
From centuries-old texts to first-edition classics, the market attracts everyone from private collectors to museums and institutions. When the hammer falls on a historic piece of Americana or an early signed work by Thoreau, one can only speculate who – or what entity - placed the winning bid.
The items might be torn, tattered, and dusty (depending on if they still have their jackets), but the market is as alive as ever and records are falling daily.
The premium for Potter. In 2021, Heritage Auctions sold a first edition copy of J.K. Rowling’s Harry Potter and the Philosopher’s Stone for $471,000. The sale set a record for modern literature as the final price easily surpassed any previous result for a 20th -century fictional work. If one of the first-edition books can command almost $500K, what could the original watercolor cover art yield? We’ll start with the answer and follow with the details.
$1,920,000.
Last week, Sotheby’s presented the design, created by artist/author/illustrator Thomas Taylor in 1997, with a presale estimate between $400,000 - $600,0000. The upper range of that estimate would’ve been enough to set a record for any Harry Potter-related item. The final tally beat that high estimate by more than 3x and surpassed the Potter memorabilia record by more than 4x. The watercolor was making its first auction appearance in over two decades, having last sold in 2001 for £85,750, or $106,000 for those who read in USD.
Heritage hammers a new record. Sotheby’s wasn’t the only auction house to hold a notable book and manuscript event last week. Heritage closed an auction curated from the private library of William Strutz in record-breaking fashion. The 226-lot event realized more than $5.6 million in sales, the most ever for a book-centric auction held at the Dallas-based house. In total, six different lots, ranging from F. Scott Fitzgerald’s The Great Gatsby to J.R.R. Tolkien’s The Hobbit sold for six figures while another dozen books hammered for more than $50,000. The top sale of the historic event was delivered by Mary Shelley’s 19th -century classic Frankenstein, which closed for $843,750. It's not the first time Shelley’s gothic novel has found itself in the news. In 2021, Christie’s sold a better-conditioned copy of the three-volume set for $1.17 million which established an auction record for any printed work by a woman.
Turning our attention back to Heritage, the success found in this most recent auction is merely the continuation of an impressive run for the rare books and manuscripts department. Prior to 2023, no auction within the category had topped $3 million. In July 2023, Heritage sold a broadside copy of the Declaration of Independence for $2.9 million as they closed their Historical Platinum Signature Auction with $5.65 million in sales. The auction house followed with two more sales, one featuring rare books and the other showcasing manuscripts, which both realized seven figures before this latest auction featuring an array of English and American literature attracted more than 450 bidders who combined to pay $5.66 million.
There’s money in the manuscripts. It would’ve been unpatriotic of us to cover the book and manuscript market during the Fourth of July week and not highlight the most recent Declaration of Independence sale. Worry not, for yet another broadside edition just sold for millions. Last week, Sotheby’s sold the print for $3.36 million against a pre-sale estimate between $2.5 million and $5 million.
Speaking of multi-million-dollar artifacts that probably belong in a museum, Christie’s recently sold the Crosby-Schøyen Codex, a 1,700-year-old text that is believed to be one of the earliest books in existence. The pre-sale estimate targeted $2.8 million - $3.8 million with the hammer and premium ultimately falling at $3.9 million. While not an earth-shattering result by any means, considering the auction record for a book sits just below $40 million, it’s now all but impossible to secure any of these historic manuscripts without paying at least $2 million. That noteworthy sum is a strong sign for the overall market but could be pricing museums out of the industry as private collectors continue to drive valuations to new heights.
Results Round-Up
Sotheby’s sold William Blake’s Songs of Innocence and Experience for $4,320,000 against an estimate of $1,200,000 - $1,800,000. The book is believed to be one of only 24 copies printed by the poet himself during his lifetime.
In the same event as the sale of the original Potter art, Sotheby’s sold a manuscript of The Sign of Four, the second Sherlock Holmes novel, heavily notated and signed by Sir Arthur Conan Doyle, for $960,000.
Brigham Young’s copy of the proof of the Stone facsimile of the Declaration of Independence sold for $600,000, hammering at its $500,000 low estimate. John Quincy Adams, concerned with the Declaration’s deteriorating condition, commissioned William Stone to make an engraving of the document.
Lelands sold a BGS 7.5 LeBron James Exquisite RPA (numbered to 23) for $351,029. A like-graded example with a superior patch sold at Goldin in October for $396,500.
Comic Connect wrapped its Event Auction, selling a CGC 2.0 copy of Superman #1 for $196,905. That’s modestly above the $180,000 Heritage recorded for a CGC 1.5 the week prior.
Julien’s sold an original storyboard depicting the failed assassination attempt of Austin Powers on the toilet for $3,900.
Julien’s also sold more than $5.4 million in Princess Diana memorabilia, but we’ve got more on that next week. Stay tuned.
Photo: Lelands
Wobbly proof can lead to wobbly outcomes, even when it comes to the wobbly foot of Michael Jordan.
In October of his second season, Jordan broke his foot, sidelining the rising star for six months. It also sidelined original versions of the Jordan I, as he frequently wore modified versions upon his return.
Lelands conducted significant research to clarify the backstory of the apparent pair he wore the fateful night of his injury. The house confirmed modified Jordans were worn in 13 of 18 post-injury games that season, lacking photo evidence to confirm the remaining 5. However, those findings heightened the chances that - if these were the pair worn the night of the injury - they were the last original, non-modified Jordan 1s he wore in game.
But then there’s that caveat, that “if.” Despite a look at newspaper photos and YouTube highlights from the game, the evidence was not sufficiently high resolution to facilitate a conclusive photomatch. In early 2022, that array of evidence, combined with the consignor’s assertion his father obtained the sneakers directly from Jordan that night, resonated very well with bidders: the sneakers sold for $422,130.
Last weekend, though, the bidding crowd was not as hospitable, and the pair sold for just $168,851. That’s a loss of $253,279 or 60% (31% annually) over two-and-a-half years, all before netting out buyer’s premium.
 Photo: Sotheby’s | 7/3 - Sotheby’s Master Sculpture from Four Millenia
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 Photo: Christie’s | 7/3 - Christie’s Legendary Trunks: A European Private Collection
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 Photo: Sotheby’s | 7/9 - Sotheby’s NBA Auctions | 2024 NBA Finals & Playoffs
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Also on the slate:
Closing 7/5 - Sotheby’s Paris Modern & Contemporary Discoveries
Closing 7/6 - Iconic Summer 2024 Autographs & Memorabilia Feature Auction
Closing 7/8 - 7/9 - Julien’s Push it to the Limit | Luxury & Lifestyle: A Rick Ro$$ Auction
Closing 7/9 - Sotheby’s Fine & Rare Whisky | The Umberto Angeloni Collection
Closing 7/9 - Sotheby’s Bibliotheca Brookeriana III: Art, architecture and illustrated books
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