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For some, sneakers become both a market and an addiction


Vachetta Tan from Nike
Source: Nike
Vachetta Tan from Nike

For most, the annual NBA All-Star Weekend that took place this week is a celebration of the best professional basketball players in the world. Yet, for others, those three consecutive days in the middle of February often mean much more.

For so-called "sneaker heads," it's a time that coincides with some of the most anticipated sneaker releases from their favorite brands and players.

Earlier this week, NBA superstars like LeBron James, Stephen Curry and James Harden were among those players flaunting All-Star themed colorways and versions of their own sneakers on the court in New Orleans — under the umbrella of big name shoe sponsors like Nike, Under Armour and Adidas. This weekend, Nike is expected to release two retro versions from the wildly popular "Air Jordan" line named after basketball legend Michael Jordan.

The sneaker industry has exploded into a full-fledged marketplace where a colossus like Nike can reap nearly $8 billion in quarterly brand sales, based in part on demand for designer sneakers. Meanwhile, a pair can be purchased and easily resold on the secondary market for multiples of its original price.

It's a unique economy filled with avid collectors, product-flippers, scam artists, thieves, automated bots and entrepreneurs that seek to cash inon a market with massive demand and potentially high returns.

Across the country, these coveted sneaker drops often trigger fervent, relentless traffic to countless retail outlets and computer screens, where enthusiasts lie in wait for the shoe bounty to arrive. It's all very much in keeping with what one particular sneaker zealot told CNBC last year was a "culture" — one that comes with its fair share of drawbacks.

"I don't want to speak on behalf of all sneaker heads, but I think a lot of it is appreciation for the shoe," Sam Sheffer, a 26-year-old creative producer for Mashable, said. "The shoes looks cool, and they look good on feet, and it feels good having a collection of dead stock shoes."

Looking cool comes at a substantial cost, however, as many top line products like Air Jordans, Kanye West's "Yeezy Boost" imprint and others retail for hundreds of dollars. On the secondary market, the value of those shoes tend to get inflated — sometimes by as much as four or five figures, depending on the year or the model of the sneaker.

In pursuit of their passion, hardcore collectors like Sheffer operate surreptitiously in the cover of night, crouched in front of laptops and mobile devices — not unlike computer hackers. As it happens, they sometimes spend thousands of dollars, and countless hours, for shoes that may never even see the light of day.

"I have 25 pairs of shoes that I've never even put on my feet," Sheffer told CNBC. "Those I bought for the intention of just holding onto, but if I ever one day want to [show off], I have 25 pairs of fresh kicks to choose from — or, in 15 years, if I need a couple thousand dollars, I can flip them easily."


(Nike) Dunk Low Pro SB “Paris”- $11,000
Source: FlightClub
(Nike) Dunk Low Pro SB “Paris”- $11,000

'It's a real thing'

Still, being a sneaker chaser comes with more than its fair share of drawbacks. The culture thrives in the face of a rash of scams, robberies and violence that often provoke hard questions about whether materialism has run amok.

Violence and tragedy have overshadowed the sneaker market for decades, at least since 1989, when Maryland ninth-grader Michael Eugene Thomas was shot and killed for his iconic Jordan sneakers. The incident would be profiled in Sports Illustrated's 1990 May issue, with the now infamous phrase, "Your Sneakers or Your Life," across the cover.

Five years ago, Nike announcement of a limited release of its $220 Air Foamposite One "Galaxy" shoe was enough to trigger riots at a mall in Orlando, where the NBA hosted that year's All-Star weekend. A pair of the sneakers subsequently appeared on eBay, where bids skyrocketed as high as $70,000.

The environment underscores the single-mindedness that possesses some of the most avid sneaker collectors. That obsessiveness is sometimes a virtue, but for some can easily cross the line into vice.

"It started to get to a point where I started getting there at two or three o'clock in the morning, outside waiting till 9 a.m., when the store opened," Mark Stevenson told CNBC recently. The 28 year old spent nearly a decade as a self-made kingpin of sneaker-dom, amassing 125 pairs worth tens of thousands of dollars in resale value.

Currently, Stevenson's extensive shoe collection has been whittled down to a comparatively modest 90 pairs, an expression of how two separate events influenced his early retirement from the sneaker game.

Arriving at 11 p.m. at a sneaker store the night before for the release of the Jordan "Grape" 5s a few years ago, Stevenson and a friend got caught in a heavy downpour. They both eventually scored some of the last pairs, but developed severe colds from the rain. Walking out of the store, Stevenson and his friend were each offered $600 for the now sold out $150 sneakers — an offer which his friend accepted.

"That was the moment where I was like 'What are you doing?'" said Stevenson. "It was a terrible experience, and honestly, I could have caught pneumonia just for a pair of sneakers."

The turning point came several months later when, in another queue for an impending sneaker drop at 7 a.m., Stevenson witnessed a fellow sneaker head get robbed. At that moment, one thought ran through his mind: "It's not worth it."

Stevenson told CNBC, "I can't do this anymore, knowing that there was a chance you could get robbed. It's a real thing, you see it on the TV and the news all the time, people get shot and robbed over sneakers."

However, Stevenson's epiphany is rare in a world where the competition to obtain new and rare sneaker drops remains as fierce as ever.

Just last week, Nike announced a "Vachetta Tan" version of the Foamposites, a $300 sneaker timed for release in conjunction with the 2017 All-Star game. On the secondary market, prices are already as being quoted high as $550.