Nike is ready to launch a new $300 pair of sneakers called the Lebron X, endorsed by NBA MVP and Olympics star LeBron James of the Miami Heat. This is new as a price point even by Nike’s high standards. So, let’s look at a couple of different perspectives on this.
As reported by Shelly Banjo for the Wall Street Journal: “Nike Inc. is raising the prices of its sneakers, assuming that the brand’s cachet will carry it through a period when many of its shoppers are scrounging for discounts. As labor, materials, and shipping costs increase, Nike is raising shoe and clothing prices by 5% to 10%, analysts say. A test of the approach comes this fall, when Nike will debut its priciest sneaker yet — an expected $315 LeBron James basketball shoe that includes its own electronics. The price leaps come after Nike’s gross margins dropped to 42.8% from 44.3% in its most recent quarter ending May 31, the sixth-straight year-to-year decline.”
Click the image from Nike for a WSJ video clip.
Dimas Sanfiorenzo addresses the price issue from a different vantage point: Don’t we have to blame ourselves for being enticed to buy gear such as this? Sananfiorenzo says: “Ten years ago, Jordan, a brand under the Nike umbrella, released the Air Jordan XVIs. It was an average sneaker in almost all regards; however, there was an aspect that made the sneaker special: its price. The Air Jordan 17 was the first Nike sneaker to retail for $200 dollars. Ahhh, the good ol days — back when sneakers were cheap! When the Wall Street Journal article was published, there was outrage from everyone from sneaker heads on Twitter to sports columnists, who aren’t really embedded with the sneaker culture, with the general census being that Nike took things too far. Well, the truth is, Nike took things too far because we let them. Nike is testing us. They are seeing if they can release a $300 dollar shoe and have it be a success. And I think they can.”
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Public reaction must have had some effect. Nike has lowered the price to $270: http://espn.go.com/nba/story/_/id/8373804/lebron-x-souped-lebron-x-sneaker-retail-270