Forget stocks. Sneaker futures are making Wall Street look like a swap meet.
High-end kicks are becoming the currency of choice in New York, and one 16-year-old is taking advantage of the trend — using his own five-figure stock of 45 mint-condition basketball shoes to open the world’s first sneaker pawn shop.
“Young kids don’t have jewelry. They don’t have cars,” said Troy Reed, dad of young entrepreneur Chase “Sneakers” Reed. “But what they do have is the thousands of dollars worth of sneakers in their house.” Chase, a 10th-grader at Frederick Douglass Academy in Harlem, still marvels over pictures of the freshest sneaker designs online and waits in line for hours to add to his collection. Only now he and his father are also getting them from fellow “investors” who want quick cash.
They have all sorts of reasons for selling short. One pawned fancy footwear to pay for his brother’s funeral. Two teen girls liquidated their sneakers to pay for prom dresses. Another savvy investor flipped a pair of LeBron Crown Jewels and two pairs of Jordans and used the thousands in profit to pay for his move to The Bronx from Brooklyn.
The store’s priciest pawned pairs so far — those Crown Jewels — are commanding $1,400, more than five times the $270 sticker price. “I don’t look at it like a business. It’s what I do. It’s what I breathe,” said Chase. “It’s an idea that’s right in front of your face. It’s just about bringing the idea to life.”
During school hours, his father and their sneaker-maven pal Rahsaan “Uncle Bless” Capers man the shop at Lenox Avenue and West 120th Street. They’re looking for “high-end sneakers or dead-stock sneakers” — pairs that are no longer being manufactured. If a prospective pawner’s kicks qualify, they give the shoes a whiff, check to see if they’re yellowing and examine the soles for excessive wear.
“After we evaluate it, we’ll give the kid, say, $100 for the sneakers. If he wants them back, he’ll pay the $100, plus $20 for storing the sneakers,” Troy said. If someone makes an offer, the pawner is notified and has the right of first refusal, provided they can pony up the cash. If the sneakers sell for more, the pawner keeps 80 percent of the profit and the rest goes to the store.
A lightly worn pair’s value can jump exponentially compared to its initial retail price. A pair of Nike Air Yeezys — Kanye West’s signature sneakers — are currently selling for from $1,700 to $15,000 on eBay. Originally, they went for $263. Kanye’s own purported pair of Yeezys are going for $50,000.
Capers, who owns three pairs of Yeezys, said he has been offered close to $17,000 for the trio — a better profit margin than Apple stock.
“I’m still not ready to bring them in yet,” he laughed. “I’m waiting for a sneaker expo first.” The $30,000 in seed money for Sneaker Pawn came from Chase selling off his own collection — which peaked at 200 pairs.
He and his dad came up with the idea when Chase asked to borrow $50 spending money after waiting all night to dole out his father’s hard-earned cash on a new release.
“I was like, ‘Are you serious?’ I’m holding these sneakers until I get my $50 back,” said Troy Reed, who got his start in business making and selling documentaries about Harlem druglords like Alpo and Rich Porter. But Chase didn’t just plant the seed for the idea or help raise start-up money. After school, he does homework and then stays up late custom-painting sneakers. Typically, he’ll earn between $150 and $250 for each custom paint job.
“Luckily when the store opened, school started slowing down,” he said.