While transcribing Brett Golliff‘s forthcoming Nike Basketball Elite Series “Design Insight” interview with Jason Petrie and Leo Chang, I came across a great slice of sneaker news which I’m pulling now to examine in deeper depth: Nike only made approximately 10,000 to 15,000 pairs per colorway for each of the three featured shoes in their Playoffs pack consisting of LeBron 9 PS Elite, Kobe VII Elite, and Zoom Hyperdunk 2011 Elite.
The newsworthy snippet materialized from the mouth of Swoosh hoops Design Director Leo Chang. Except for on certain super limited runs where everyone knows a particular shoe is produced in a quantity of say 1-of-12, or 1-of-100, and Nike advertises it as such, the company rarely discloses footwear production numbers. It happens from time to time to prove a sales point, like when Nike CEO Mark Parker disclosed that last year’s Jason Petrie-designed LeBron 8 model sold half a million pairs.
But it’s been an interest to us for a while now in how these new barrier breaking price points for the basketball category of $200 and $250+ would be received by consumers and what the total production run Nike is creating at those elevated sticker costs. Soccer athletes are used to $300 or $400 priced boots already, but it’s new territory for hoops sneakers by the major brands.
Let’s do some math before we get to the potential reasoning…
Nike LeBron 9 PS Elite ($250)
Nike Kobe VII Elite ($200)
Nike Zoom Hyperdunk 2011 Elite ($200)
So at a minimum level, 10,000 pairs times the $200 Kobe/Hyperdunk retail cost comes out to a $2 million take. 10,000 pairs times the $250 LeBron postseason shoe comes out to $2.5 million. 15,000 pairs equates to $3 million for the $200 kicks and $3.75 million for the $250 Bron.
Using those guides, we can estimate the known released and scheduled Nike Elite Series models (four LeBron 9 PS Elite colorways, and two each of the Kobe VII Elite and Hyperdunk 2011 Elite) and gather up the total take on the entire pack.
For the LeBron 9 PS Elite, a baseline 40,000 pairs (4 colorways x 10,000 shoes) comes out to a bottom line of $10 million, or playing the upper range, 60,000 pairs (4 colorways x 15,000 shoes) totaling $15 million.
For the Kobe and Hyperdunk, each have two colorways at somewhere between 20,000 and 30,000 pairs for $4 million and $6 million respectively, or combined, $8 million for 40,000 pairs and $12 million for 60,000 pairs.
Add up the Kobe/Hyperdunk figures with the LeBron tally and with a combined 80,000 pairs produced for the trio of shoes on the low end you get a retail revenue line of $18 million dollars, or, at the top line of 120,000 pairs for the three Elite shoes produces a net retail gross in excess of $27 million dollars.
Ok, then. But what does it all mean?
What is Nike attempting to do with these high price points in basketball coupled with low production numbers? And why?
We pitched that question to our man Matt Powell, footwear industry analyst at SportsONESource. Here’s the exchange from my phone conversation with Matt on the subject…
CounterKicks: On Nike Basketball’s new Elite Series playoffs shoes, we’ve been told each colorway’s production run is only 10,000 to 15,000 pairs.
Matt Powell: That sounds about right. I think they’re really pushing the envelope on price there, but those kind of numbers sound about right.
CK: Are they just trying to test the price point or is this purely for the buzz and marketing hype of it? What do you think Nike is trying to do?
Powell: That’s an interesting question. I think we’re in a period now where we’re starting to really push the envelope on pricing. It’s somewhat uncharted territory. I think we really don’t know how a shoe is going to do at certain prices. I think there’s a little bit of guessing in price and at the same time I think Nike loves to always have less than there’s demand for.
Nike’s new price testing also serves as a bridge for upcoming product launches, and may help bridge consumers mentally to items like this summer’s coming Hyperdunk 2012 model which features a $275 sensor-equipped version and the looming $315 priced LeBron X+ rolling out this fall.
Follow CounterKicks on Twitter for breaking sneaker news and exclusive info
Incredible scoop and reporting. No wonder the Lebrons moved so quick. This is why I love Counterkicks
Great point being made here, seems as if they are testing the waters price wise. We all know inflation of goods and materials are involved in this price/cost decision. Most of us thought the elites series had a higher amount of shoes produced for this production run, due to shoes sitting on shelves right now as we speak, along with Nike’s restocking throughout this past week. Thanks Counterkicks for bring this up along with other info in the past that brings us closer to what is going on behind the scenes.
It’s really just good business. Given the price point, Nike knows that a strong majority of people will not pay that price but there are a few who will. This is the market they are targeting. If they build the hype of a particular release they know a large contingent of sneaker enthusiast will be all over it. A given that there are more enthusiast than shoes being produced the shoes will fly off the shelves. At least in theory because the elite series are not moving here in my neck of the woods.
The way this article is posed, it makes it sound that since “one half million of the 8′s were sold”, it was due to it being a “Jason Petrie design”, which is something that promoted his puffery exhibited via twitter.
However, I am quite certain that the impact of his design was minimal in regard to that shoe selling well. Taking into account that just as with jerseys, last year was LeBron’s first year with a new team. This ushered in a new interest, love it or hate it, in product and jersey’s worn by James. Cav’s jersey’s were burned in some parts, but the new Heat jersey’s were bought as well. With Nike adding DJ Clark Kent being a part of the buzz via the ‘net, the 8 had more sex attached as off court swag.
I understand that you cats want to promote, then make the designer some kind of celeb, as this is what you do. However, that motherfucker, Jason Petrie, is a bit too thirsty for that sort of spotlight, especially since everything he has ever done in footwear has flopped before his being attached to the controversial LeBron James.
Yeah, I said it, and I hope that he does not like it.
I personally liked the Air Flight Banger and Zoom MVP he did for Nash.
Concerning Nike, they’re not holding a gun to anyone’s head and ordering them to make the purchase. They’re simply offering another option…a more expensive option, but an option nonetheless. If anything, I’m glad they did it because it forces people to really scrutinize things that they may not have before. I mean, having a swoosh on a shoe used to be reason enough, but creating a higher price point may create savvier and more informed consumers who may want to justify their purchase.
Other companies will also benefit due to people inevitably being out off by what may be construed as a bravado price range. Maybe loyal swoosh consumers will be more inclined to try on a pair of Adidas due to this price point.
In the end, I used to be opposed to the idea, but now that I think about it, this ballsy attemp can only do positive things as long as the consumer is smart.
Got my Black/Gold Lebron Elites on foot as I’m typing. I got the South Beach/Miami Vice Bron Elite in closet that I wore yesterday and I can’t wait to snag the Varsity Maize colorway when they drop! By far my favorite shoe of the last year! I wish there were more colorways in the Elite shoes!!
The elite series is a cool idea because it’s really pushing the envelope of footwear and how good they can be. Personally I don’t think that $250 really justifies the Lebron’s price and $200 for the HD and kobes is still too much. They are giving us technology that’s been around for so long. Full length zoom has been around since I want to say 1995-96. Nike is just trying to justify these prices with materials being used such as kevlar, and carbon fiber. Sure they might sound expensive but does anyone know how much they actually are? I understand that the prices got to go up but they are still too high. No one in my area is buying the Elites or any shoe that is over $150. I don’t want basketball shoes to be like soccer cleats. $400 for cleats is utter bull! There used to be a day when you could get a great performing shoe for a decent price but now i fear those days are truly gone.
Welll,pics are starting to surface of these “elite” shoes, with the swoosh being either chipped, or simply being separated from the shoe during play.
If the shoe is truly a superior performance product, one that uses “plastics” that are claimed to be “high quality” materials, those that do not bond together well enough in order to support even the aesthetics, the visuals of the shoe, what makes it worth two hundred fifty dollars?
So again, as I stated on an earlier thread in regard to the Jordan 2012, do not give me plastic, then try telling me “superior performance product”, similar in price to a one way flight from NYC to Aruba.
I hate the price of LeBron ps it a nice shoes but 250 come on Nike don’t you think that rape price it start to make me wanna stop buying Nike shoes prices like that
I starting to think the shoes game isn’t for me anymore prices like this 250 to 315 come on now….,
Yea i just got both colorways for the lebrons size 13 and im starting to feel the same way about the prices jumping so much so i am just going to return them tomorrow but if anyone see this and wants them b4 i return them let me know.
Very good kicks can be had for $65 with 95% or better of the elite performance. Like Howard 2 or MJ P.I.T.
Mede , I like how you came straight real ! All these clown half ass designers getting there ego into orbit as if there the next tinker, or smith ? Majority of that guys designs are near the end of the Jordan era look. like that lebron 7 didn’t look like a Jordan 11 on steroids ? Stop it .. Nike is the evil empire of inflation and merchandising they have been doing it for years only thing I think they deserve props for is there material textile decisions and color schemes because there designs lack the risk factor of the early 90′s cutting edge designs, that made them famous besides from the high powered endorsed athletes that are attached to the selling scheme. that being said screw these silly prices for overhyped not that great designs and put a damn ironman man shoe that can make me fly and not fall apart for $310 maybe I won’t feel raped for my purchase?