Sneakers: Consumers seeking ‘chunky styles,’ GOAT Group CEO says
GOAT Group CEO Eddy Lu joins Yahoo Finance Live to discuss sneaker trends, partnerships and acquisitions, and whether the company plans to go public.
Video Transcript
BRAD SMITH: The chase for the freshest kicks and hottest drops continues as retailers ramp up for the holiday season and the shopping that is set to commence. Online marketplace and sneaker specialist GOAT, they are hoping to ride the trend with an app and web platform, a seller marketplace, and even a brick and mortar presence in New York City.
Joining us now with more, we've got Eddy Lu, who is the GOAT Group CEO. Eddy, great to speak with you and really get kind of your insights going into what's anticipated to be a hot holiday shopping season. But it's also at a time where some of those consumer discretionary dollars, they're going to be battled for in a heavy promotional cycle. But the resale market, there's no promotion to be found there, typically.
EDDY LU: Hey, great to be here and really excited. We just had our-- published our first ever sneaker trends report, so excited to chat about all the hot trends for 2022. I mean, we have 40 million members on our platform, so we really know how the next generation shops.
And let's just start with the heavy hitter. The Jordan 1, it is always traditionally the most selling sneaker in our platform every single year, but it was unseated this year. The Nike Dunk actually unseated the Jordan 1 in sales for the first time ever. And it's thanks to the Panda Dunk that we've seen. Now, Nike has actually, because of the demand, they've rereleased the Panda Dunk five times over this year. So we've seen a huge trend to Dunks this year.
BRAD SMITH: OK, so for Dunks that have done so well, it's also what I've noticed is that Nike continues to release more and more Dunks. And with that, that kind of compresses or, at least, makes it so that the resale market doesn't get out of control, knowing the type of demand that there is for that. If there is this effective kind of campaign or move by a company as large as Nike that's got this popular fanfare around one sneaker that sells so well, does that show up in your business if they are effective in battling against resellers and bots out there?
EDDY LU: Well, what we're seeing with the Nike Dunk this year is that there's just so much demand. And we're still seeing prices on our platform higher than retail prices because the Dunk is so popular. People are moving to comfort this year. And what we're seeing with the Dunks, especially, is that these chunky styles are just more in this year because of comfort. People are going to chunky styles. They're going to slides, for example, because, yeah, they just want-- the world is getting more casual, and they want something comfortable.
JULIE HYMAN: Eddy, it's Julie here. Obviously, we have seen this explosion in-- this used to be something, even just five years ago, that was really just sort of a collector's market. And now it is much, much more mainstream. Is there any sign of a slowdown at all in the demand for these types of sneakers?
EDDY LU: I mean, you have to wear sneakers when you go out, right? And what we're seeing is that even as the economy changes and times change, people want to buy products that make them feel great, that they want to wear out. So as we're seeing times change, we're seeing that buyers want a variety of price points. And so sellers are really giving those price points.
I'll give an example on the apparel side, where now vintage apparel is in, and we're seeing vintage luxury being a big, big theme this year so that-- and it's a variety of price points when you're buying something vintage. So whether it's a varsity jacket or cargo shorts or cargo pants, for example, or even all of our denim, these styles are in, and it's allowed people to buy from different price points.
BRIAN SOZZI: Eddy, how collectible are Kanye's remaining lines at Adidas that are going to get-- that are going to hit the market, if they haven't already?
EDDY LU: Well, just like with the stock market, whenever there's big news of something, asset prices will fluctuate, right? And Kanye's line is no different, where we did see fluctuations in prices initially, but they've kind of settled. And it's really up to the consumer in the future to see what they want to purchase in the future.
What we have seen as a trend this year in terms of just impactful and hot styles, though, is that New Balance has really come up as a brand. And for the first time ever on our platform, New Balance, for a few days, surpassed Adidas in sales. And it's thanks to the styles like the New Balance 550.
BRAD SMITH: That's interesting. And I have seen more New Balances on the street, so people are clearly buying them, but also wearing them, not just sitting on them, too. And they're pretty comfortable, too. I've tried on a few of them myself. Also, while we do have you here, Eddy, you've got to talk about the raise that you were able to do in 2021, $195 million there. Right now, how well capitalized is the company? Do you think about tapping the public markets in 2023? And what's the criteria that would really set that in motion for you?
EDDY LU: Well, at GOAT, we really stress operational rigor and financial discipline. So we've never been a growth at all costs type of company. So every single month, every single day, we're looking at our financial profile. And thankfully, we've been able to do so, so that we haven't had to do anything extreme like some other companies have done. And so, yeah, definitely stay tuned.
We are building a company for the long run. And when the time is right, we may go out. But right now, we're perfectly happy where we are and are at a comfortable cash position.
BRAD SMITH: What would be a desired timeline for you, if you did want to tap into the public markets and kind of transition the company to be able to really make even more of a wave internationally, too? You've got a great brand that you've been able to build out. And I've been in a flight club time after time again, just hoping that some of the prices come down.
EDDY LU: Well, we're thankful that you're a customer. For us, we actually just announced an acquisition that we did a few weeks ago, a company called Grailed, which is a luxury and vintage apparel marketplace. And so there are a few things we want to do before we end up going public. One is, of course, integrating with Grailed. They have an amazing platform for the fashion enthusiast. And as apparel is in a very important part of our growth strategy, the acquisition will help us grow on the apparel side.
BRAD SMITH: GOAT Group CEO Eddy Lu. Eddy, great to have you here with us today. We've got to check back in with you on some of these trends, see if they're holding up. And I got to figure out where I can get the sneakers at that are not resale-- it's just so expensive, Eddy. It's hitting me. It's hitting me hard.
EDDY LU: Hey, foam is in this year as well. So buy some of those Crocs, some of those foam pods, the Yeezy slides, et cetera.
BRAD SMITH: Done deal.
