Gold Standard Part I: The Fall of Jordan Brand
Today, the sneaker industry is not what it used to be. That’s not a bitter old man’s perspective (20-something) waxing poetic about the “good ol' days” and how kids today armed with their parents' credit cards, bots, and an active IG account are ruining the game. No—it’s far worse than that and it has been for some time.
Our fractured sneaker market runs parallel to our hastening collapse of the US Dollar. For complete transparency to the reader, I am not an economist nor will I bore you with any misguided attempt to make such a claim. I am but an avid sneaker collector and a mild history buff —or maybe a conspiracy theorist—that could not help but connect the dots. It all started with—you guessed it—President Richard Nixon.
If you thought you’d ever see that name appear in the modern day blogosphere amongst names like Yeezy and Ronnie Fieg, you deserve some recognition or some sleep because that would mean that we're thinking alike. I’ll get to it.
On August 15th, 1971, President Nixon announced to the world from the Oval Office that the United States would be divorcing the globally recognized Gold Standard. Before that date, the US—like the rest of the world—used gold as a monetary system in which paper money was convertible into a fixed amount of gold. Not anymore.
This announcement was known as Nixon Shock. After which, gold prices jumped more than 2000% in a decade from around $35 per ounce to $850. So what did that mean for those little green notes in everyone's pocket? It meant that they were now traded and accepted everywhere on, well…faith. Faith that the dollar is just as strong as Uncle Sam said it was.
In the realm of sneaker reselling, we buy, sell, and trade in a way that directly mimics the stock market. Buy low and sell high. The secondary market is a gauge for the shoe's value after retail which helps maintain the company's prestige or status. From a conceptual standpoint, consider your footwear as a kind of social currency, if you will.
Enter Jordan Brand. Michael Jordan has been showing kids and adults alike how to get it done on and off the court. His talent backed by the genius Nike / Widen + Kennedy made Jordan an icon and the world has never seen such a star burn brighter. Every aspect of his life from his career highs (and lows), passions, friends and family have all been packaged and sold in the form of footwear.
Even his nicknames and alter egos have seen releases to much success. If Jordan's shoes were US currency, then his career is the gold that once backed them. In fact, this analogy sums up what made Jordan Brand such a force to be reckoned with. And this is where JB and our nation’s dollar dangerously collide.
December 23, 2008, Jordan Brand closed out their overwhelming releases of the iconic XX3 and aptly dubbed it the ‘Finale’. It would seem that Jordan’s off the court legacy was now coming to a close after reaching a number synonymous with the man and the brand. This was the last untapped reserve of gold for the brand after MJ's retirement for the company to introduce.
It's special to note that every shoe thereafter was released sans the roman numeral signifiers until the XX8. What made the shoes iconic was equal parts Jordan himself building a tremendous career and the sneakers crossing the chasm into into popular culture as the ultimate status symbol amongst young adults, entertainers, and tastemakers.
People want to wear the shoes of a champion. To be honest, we've all been buying Jordans on the faith system since he retired from the NBA in 2003 in the XVIII. Before MJ signed with the Wizards, we've seen Jordan Brand produce models that represented Jordan in concept but had no real value for the now retired athlete to wear. This is what economist would call fiat money:
Fiat money markets are always unstable and eventually morph into commodity markets (I'll explain in a moment) or face complete currency disaster. Proof of this term takes us back to his retirement for the second time in 1999 in the AJ XIV and the company came up short with the XV being arguably the worst shoe from the Jordan line.
This moment from a company standpoint could be known as "Jordan Shock." Even with Team Jordan sporting the shoe on the court, without Jordan Brand's guiding light to lead the way, it would be considered an airball model after Jordan's departure, setup to disappoint and in great fashion. The marketing and credulity of the fans would help make every shoe thereafter a (recuperating) success.
The vehicle that help solidify the flagship models was that the most impressive player the world had ever seen wore them. The success behind the shoes are what helped push these colorways into to iconic status. This is what economist would consider commodity money.
I never expected Jordan Brand to go away quietly. That would be in stark contrast of the man behind the brand. Fiercely competitive. When Jordan was building his empire through sweat equity on the courts in the 90's on the Gold Standard, we saw the success of the brand compete with other growing athlete "currencies": Pennys, SC Trainers, Agassies, and Iversons to name a few.
All athlete backed lines piggyback on the success of the athlete. Jordan just championed this business model. Like our dollar, JB may be headed for a collapse. Retail prices are inflated, the secondary market for retros are slowly declining, and we're seeing some classics do what we haven't seen happen at a retail level for a while...sit on the shelves. Or even worse, go on sale.
Every shoe after 2008 seems like JB is printing their own money in retros, new models, and intrinsically worthless Team Jordans to stay afloat. Much like the US printing money in excess of real value in the economy.
Their best days are now behind them. The constant devaluation of the brand plus the artificial limited supply of retro models every year can only go for so long. They don't just happen upon a restock of limited releases months later by chance. Even Drake, Don C, Doernbecher Childrens's Hospital and the occasional Eminem collaboration have proven that strategic partnerships work for short-term gain but it's evident that Jordan Brand needs a new champion.
The challenge will lie in the transition of power. In sports, talent is the only real commodity and while Nike may be the empire, JB is a big source of currency and is in need of some hard realignment to survive in the long-term. Some valid proof to a younger audience—and a maturing one—that the brand is still worth it's weight in gold.
Share your thoughts below and stay tuned for Part 2.