Since its birth around 1980, what we today call streetwear has generated a center of gravity so enormous it often feels destined to implode like an overgrown star – a supernova casting logo-stamped nunchucks and neoprene slides to every corner of the universe. Yet in summer 2019, the pull of “the new luxury” is stronger than ever.

Miles Nadal, the Canadian collector who recently paid $437,500 for one of 12 racing flats designed by Nike co-founder Bill Bowerman (plus a further $850,000 for 99 other rare shoes) told the BBC that “sneaker culture and collecting is on the verge of a breakout moment.” The prediction was underscored by Noah Wunsch, global head of e-commerce at the auction house Sotheby’s, who organized the sale: “Sneakers are now collectible art.”

But what about the hype collectibles of the not-so-distant past: Beanie Babies, Pokemon cards, Furbies? “More than any other consumer good in history, Beanie Babies were carried to the height of success by a collective dream that their values would always rise,” financial journalist Zac Bissonnette writes in his book The Great Beanie Baby Bubble. Like Supreme, Beanie Babies’s parent company Ty produced covetable limited editions, sold at exclusive retail outlets, and used artificial scarcity to produce a vast resale market. In 1998, 10 percent of all eBay transactions were people flipping Beanies.

This June, recommerce sites The RealReal and StockX were valued at over a billion dollars following cash injections from prominent venture capital firms. A recent report by Cowen Equity Research identified sneakers as an emerging asset class – a unique commodity with a global aftermarket estimated to be worth six billion dollars. “Men lie, women lie, numbers don’t lie,” says Lawrence Schlossman, former menswear editor at Complex and Four Pins, who is now brand director at Grailed. “For now the big question is scalability. How big is this going to go in the next year, in five years?”

And yet, when asked to look beyond the near-future, most commentators grow cautious, aware that in an ecosystem driven by obsession, it takes a dubious confidence to talk in years, decades, or centuries. “I’m not a psychic, I don’t know,” Schlossman continues. “Right now streetwear is at the absolute molten hot core of capital F fashion – but fashion is very fickle.”

Designers like Virgil Abloh are not only introducing streetwear culture into the fortresses of high fashion — he’s also exhibiting at galleries and museums in Chicago and LA. Art is another professionalized industry that might offer clues as to where the market is heading. In May a 162-item collection of Supreme accessories was sold at Sotheby’s Hong Kong for two million Hong Kong dollars. It was a “white glove sale” in the industry lingo, meaning every lot was immediately snapped up. It symbolizes Sotheby’s “commitment to evolving and expanding the types of works we sell,” says Yuki Terase, Head of Contemporary Art Asia at the auction house, and “furthers our evolving definitions for art and collecting.”

Everywhere you look, streetwear is entering the canon, but behind the triumphalism and disruptive energy, important infrastructure is being laid down. A 2019 report by resale giant thredUP estimates the secondhand apparel market will grow to $51bn by 2023, up from $28bn today. “All the risk has been taken out of the secondary market,” says Jesse Einhorn, Data Content Director at StockX, whose visualizations of trading data make it possible to track prices the way Bloomberg tracks Amazon shares or the price of gold.

In order to assess the future prospects of the streetwear market, it’s necessary to examine the dynamics that have fuelled its rise so far. The Internet has fundamentally changed how value and worth are established, amplified and maintained. (It’s worth noting also that Ty launched a Beanie Baby website in 1995 when just 1.4 percent of all Americans were online, and the product’s popularity grew in tandem with the web.) The old logic of subculture versus mainstream is, for the time being, dead in the water. Online, brand credibility functions like a meme. It’s a signal meant for as many eyeballs as possible, giving outsiders the option to feel like they are part of a club..

“Look at this pen,” says sociologist Simon Susen, holding up a cheap biro in his office at City, University of London. “Right now it’s just a standard industrial object like a thousand others. But what if I told you it was owned by François Mitterrand or Winston Churchill? Suddenly it is transformed.”

Susen is referring to a new way of thinking about objects theorized by two French academics, Luc Boltanski and Arnaud Esquerre, in their 2017 book Enrichment: A Critique of Commodities. After studying the ways countries like France, Spain and Italy market their histories to billions of tourists every year through museums, universities, private collections, and a torrent of PR, Boltanski and Esquerre devised a system for understanding how assets maintain value in the long-term. They called it “The Enrichment Economy.” Nerd shit, obviously, but it works.

“It means you can make profit from different sorts of things,” Susen explains. “It could be from commerce, trade, exchange, or from the construction of a narrative.”

There’s something in the nature of streetwear – the clarity of its message, the quality of the products, and the elasticity of its brand names that can be slapped onto everything from balaclavas to bars of soaps, that makes it a key test case for evolving processes of commercialization. It’s the story that surrounds a product – Yvon Chouinard of Patagonia’s mythic environmentalism, or the unlikely history of a downtown New York City skate shop that now sells bricks – which guarantees its value, making it desirable, collectible, and worth holding onto in the long-term. But will the bubble burst?

After a record year, at the start of 1999, traders waited by their 56k-wired PCs to see which Beanie Babies would be officially “retired” by Ty, expecting the prices of those toys to rise. They didn’t. The market had peaked and confidence rapidly declined. Today Beanie Babies trade at around 50 cents. They are essentially worthless.

Capitalism is a system of boom and bust. Fundamentally, prices are a record of intention, a gesture of common faith, and smart investors are attuned to risk. “If the streetwear market’s going to keep growing, there needs to be more brands,” says Jesse Einhorn at StockX. “There needs to be more products, more players – it can’t just be Supreme.” While Acne, Rick Owens, and Saint Lauren have been gaining popularity among streetwear-focused resellers, the larger point remains: the market is inextricably bound up with the brands that produce it.

The most alarming threat is retail surplus, like when Kanye and Adidas decided to ramp up production and “democratize access” to Yeezys in 2018. Not only did the resale price slump but far fewer pairs flipped. When the brand changed course this year, offering regional releases and limiting supply, prices rebounded. “It’s an illustrative example,” says Einhorn. “As long as brands reverse course on this type of behaviour then I think the market will remain stable.” For investors, what mattered wasn’t just the reversal, but that the market it maturing. It can absorb and learn.

Demographics are the last essential factor to consider. If “brands are the new bands,” as one recent Guardian headline put it, perhaps the Rolling Stones touring into their 70s suggests longevity for a generation’s chosen pop culture. Over 75 percent of the bidders at the Sotheby’s Hong Kong auction were under 40. Millennial wealth management firm Wealthsimple has a strategy for using streetwear to compound financial assets: “The Supreme Retirement Plan.” ThredUP predicts that millennial and Gen Z consumers will make up 45 percent of the luxury market by 2025, though ironically, streetwear’s model of “affordable luxury” based on scarcity may go hand-in-hand with a generation for whom precarity and stagnant wages are the norm.

“Men’s fashion in general has become such a bigger part of the average guys’ life over the past decade,” says Schlossman, “and it’s going to get bigger as the major brands start to figure out this stuff.” Although the infrastructure of enrichment is visibly growing, it remains the online community with its immeasurable, non-stop activity of buying, selling, commentary, humour and memeification that is the fission reactor for continued growth. It’s also where the pain will be felt most if the star explodes.

For a deeper dive into Supreme, watch the video below.

Words by Philip Maughan

Philip Maughan is a writer and editor in Berlin.

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