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Before that, the record belonged to a pair of 1972 Nike "Moon Shoe" racing sneakers that the auction house sold for $475,500 in 2019. Rares' purchase of the one-of-a-kind Air Yeezys blew away the previous world record for a sneaker sale, which came last year when Sotheby's sold a pair of Michael Jordan's game-worn and autographed Nike Air Jordan 1s for $560,000 to an anonymous buyer. In fact, the overall resale market for sneakers has exploded in recent years, and analysts have estimated the market could be worth $30 billion globally by the end of this decade, with investors even looking at sneakers as a bonafide alternative asset class. The shoes, which typically retail for around $200, have also been known to sell for thousands of dollars on the secondary market, including on resale websites like StockX. Four years later, West moved his Yeezy sneaker line to Adidas and Forbes estimates the Yeezy brand brought in roughly $1.7 billion in sales last year.Īfter launching more than a decade ago, West's Yeezy sneakers became a hot ticket for the growing community of "sneakerheads" - hardcore buyers and collectors of rare and expensive sneakers - many of whom have waited in long lines to secure pairs of the sneakers before they sold out. The Nike Air Yeezy line of sneakers hit stores in 2009. West developed the Air Yeezy line of sneakers with Nike and the record-breaking prototypes were the first pair the rapper ever wore, as West revealed them publicly during his performance at the 2008 Grammy Awards and never wore them again, according to Sotheby's. "I want people to come in with the expectations of, 'Man, now I can finally have access to these shoes and the opportunity to potentially participate in the the back-end earnings on them,'" Sapp says.
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Desirable new sneakers often sell out quickly, especially when resellers use automated bots to buy out stock before placing the shoes on the secondary market at a vastly inflated cost, which prices a lot of collectors out of the market. Indeed, some sneaker collectors have criticized what they see as the " gentrification" of sneaker culture, with some likening it to appropriation African American style by wealthier, typically white, collectors. for everyone, but especially the cultures and the communities that really made that sneaker valuable, that really made that sneaker popular, that kind of got priced out between then and now," Sapp says. "We wanted to make it definitely affordable. While Rares has not yet finalized the initial offering price for shares in the Air Yeezy prototypes, Sapp says he expects the shares to start selling "in the range of $15 to $25."
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He adds that the pair of $1.8 million Air Yeezys will essentially become their own "mini company and the value of that company is derived from the value of the sneaker." As with buying stocks in actual public companies, investors would be buying shares of the Air Yeezys and other sneakers with the idea that the value of those shares will increase over time, allowing investors to sell their shares and potentially turn a profit. "So in a lot of ways, the IPO and the investment process are very similar to a traditional IPO investment scenario in the real world." "This sneaker will be qualified by the SEC, so it will be an actual security," Sapp says, meaning that the SEC would regulate the buying and selling of shares of the sneakers the same way it would other securities, like a stock or a bond. Sapp tells CNBC Make It that Rares will essentially launch an IPO, or initial public offering, for the Air Yeezy 1 prototypes on the company's app and that users will be able to buy and trade shares of them (along with other rare sneakers) as they would shares of a public company on the stock market. Gerome Sapp, who played five seasons in the NFL, from 2003 to 2007, and earned an executive MBA from Harvard in offseasons, co-founded Rares in 2020 is now that company's CEO.