Stadium Goods Giving Aftermarket Appeal
The marketplace received an investment from LVMH Luxury Partners prior to being acquired by Farfetch.
“What we found when we put our sneakers and streetwear product alongside high-end fashion goods was that the match was made in heaven and I think that’s something that’s very indicative of where we are today.”
Stadium Goods cofounder and co-chief executive officer John McPheters shared this insight about the premium sneaker and streetwear markeplace’s partnership with Farfetch. The partnership ultimately led to the acquisition of Stadium Goods for $250 million at the beginning of this year.
Also this year, Stadium Goods held a sneaker auction with Sotheby’s for 100 rare sneakers, which McPheters described as “far and away the most successful press undertaking that we’ve ever done as a company,” and opened a pop-up location at Fred Segal in Los Angeles that marked Stadium Goods’ first physical location in Los Angeles.
McPheters and Jed Stiller founded Stadium Goods to create a premium experience for the aftermarket built on “best-in-show retail, great customer service,” said McPheters, as well as trust, which was lacking in the aftermarket prior to 2015.
“The aftermarket for goods both new and used was a very messy place to
transact,” he explained. “You might buy on eBay, you might meet someone off of Craigslist. There were all sorts of ways that you could get your hands on goods that were sought after without any type of experience that felt premium, or special or real.”
Stadium Goods operates a retail location in New York City at 47 Howard Street in SoHo near VFiles, Palace and Billionaire Boys Club, and sells through e-commerce and operates an app.
The sneaker and streetwear boom that took over the fashion industry took time to catch on. McPheters said the Howard Street store didn’t see many customers in its first month in business. “Literally nobody came within the first month,” he said.
McPheters and Stiller looked to other means to drive in-store traffic, which included content, activations and partnerships. “We basically retrofit our retail space into a studio,” he explained. “We started building out the personalities of people that were on our team. We started tying into as much video opportunity as possible.”
Another marketing piece for the brand is the Complex Media series Sneaker Shopping that films most of its episodes at Stadium Goods. Celebrities share stories about their favorite sneakers and go shopping for new pairs while being interviewed by Joe La Puma, the show host and Complex’s senior vice president of content strategy.
Holding inventory of brand new sneakers at its location — an anomaly for the aftermarket that usually operates with used goods — also works in their favor for content production. “Being that we hold these goods,” he said, “we actually had an opportunity to take and capture content of items that the world hadn’t seen in hand. If Nike is releasing a sneaker on a Tuesday, many times we have it before the retail release and that enabled us to create tremendous amounts of content that really drove to our audience in a way that none of our competitors could.”
One of Stadium Goods’ early activations was a learning experience for McPheters and Stiller as well. The duo invited DJ Khaled to their store for a pop-up shop and meet-and-greet, and learned how the music producer amassed legions of fans and how they could apply this learning to their business.
“Khaled is a very interesting character. Not that many people understand why his brand is so big, but when you host an event for Khaled you really get a sense of what drives his adoption and it’s that he really involves consumers at every step of the way in his journey, in his storylines, in his content, he includes people in his stories and his videos,” McPheters said. “Customers today, I think for a long time they are so used to being spoken to by brands but where we all stand to win is by really drawing in consumers and making them part of the story that we’re creating. And that’s what we learned from Khaled.”
The duo put this learning to the test in two activations in 2019 with gaming collective FaZe Clan, who hosted a pop-up at Stadium Goods that was shut down by the NYPD, and with rapper A$AP Ferg, who launched his partnership bike and apparel collection with Redline at the store. McPheters said the activations this year introduced Stadium Goods to “other audiences to cross pollinate into, not big budget activations, [but] still feel authentic and organic.”
In addition to marketing through the content and activations, Stadium Goods grew through partnerships with Tmall in China in 2016 and Farfetch in 2018.
McPheters said he and Stiller saw an opportunity in China after a customer purchased $10,000 worth of Air Jordan 1 sneakers at their store in cash to resell in China. “As we explored our opportunities, we identified a great partner in Tmall and launched in August 2016 and from there it was off to the races in many senses,” he said.
Their strategy in China is dissimilar to their local strategy. Stadium Goods rolls out short- form and long- form video on Taobao, live broadcast events, and other forms of content. McPheters used BJ’s Wholesale Club and Carrefour as examples for why Stadium Goods has localized strategies. He said when he visited Mainland China in 2007, he saw that BJ’s stores were empty, because “everything was volume- driven around this idea of bulk purchase in a very Americanized way that didn’t resonate with Chinese customers,” but Carrefour mirrored its approach after local merchant transactions.
“Carrefour in their expansion had identified that local merchants were where most of the transactions took place and they went to great lengths to create a large store that played home and host to that same local merchant feel with local merchants inside selling goods. It felt a lot more natural and for that reason you could just tell in every way it was just a much more successful undertaking,” he explained. “This lesson for me is huge in how it applied to how we decided to roll out into China and the way that we craft our storyline and content into China, which is very specialized.”
Stadium Goods’ success also caught the attention of investors such as Forerunner Ventures and Chernin Group, as well as
LVMH Luxury Ventures, which McPheters said “is one that we really hang our hat on. It’s been very exciting and game-changing for us when they got behind us in 2018 and it really speaks to a lot of the change that’s happening in the aftermarket both from a sneaker and streetwear standpoint, but also general public perceptions of the aftermarket.”
Though the investment from LVMH Luxury Ventures helped validate
Stadium Goods with a mass audience, its partnership with Farfetch in 2018 set the brand’s future in motion. McPheters spoke of the synergy between luxury fashion, sneakers and streetwear and the rise in the aftermarket, both of which served as a catalyst for its acquisition by Farfetch.
“We’re at a point now where all of these tastes have melded together in a way that is more of a soup of interests as opposed to having these different buckets, and what we see is heavy and exciting crossover and interest between high-end fashion and sneakers and streetwear,” he said. “Aftermarket adoption is at an all-time high and still very much at the beginning of its trend. Aftermarket is going to grow for years to come. That’s part of what we’ve been able to focus on since January.”
Stadium Goods partnered with
Sotheby’s on a sneaker auction for 100 rare sneakers in 2019 and McPheters described the partnership as very successful. First, collector Miles Nadal purchased 99 of the 100 sneakers except for the Nike
Moon Shoe for $850,000, and days later Nadal purchased the remaining pair for $437,000, which set a Guinness Book World Record for “the most expensive shoes sold in the world.” The partnership spurred three rounds of press coverage, first with the announcement of the auction, then when Nadal bought the first collection, and finally when he purchased the last pair and set the new record.
“We drove not only the sell through of these items, we broke the Guinness Book World Record for the most expensive shoe ever sold in the world with a $437,000 sale. In my mind this is the first of many.”
With a presence in the U.S, Europe and Asia — “China is a massive market for us and we see more tremendous growth coming,” he said — Stadium Goods is poised for expansion both internationally and domestically.
The pop up shop at Fred Segal in West Hollywood is the brand’s latest partnership. The shop opened on Oct. 17 and will remain through the holiday season into January, and will focus primarily on streetwear brands such as Supreme and Off-White than on sneakers, which is the focal point of its New York City location and its business overall. The shop will also offer curated assortments that will change often during its three-month stint.
McPheters said separately that the Fred Segal partnership is an opportunity to operate a physical presence in Los Angeles, and is the start to greater expansion for Stadium Goods.