Streetwear fashion and the resale business: the return of exclusivity

The world of fashion is constantly evolving, and among its trends, the streetwear has stood out as a business of vibrant exclusivity and urban style. And what makes this genre attractive is its ability to turn clothing and footwear into authentic cult jewels, often achieving a higher profitability compared to its initial value.

Christian Echeandia, known as “Uncle Pimp” on social networks, he has been selling and reselling streetwear clothing for eight years, through his brand, Pimp.

Throughout this period, he has noticed significant changes in the marketboth in the products as in the profile customers.

“I remember that the most important launch that arrived in Peru was the Nike Air Max in collaboration with Sean Wotherspoon. At that time no one valued it, to the point where I bought the entire stock. (…) At that moment it was difficult for me S/ 700 each pairand today they have an average resale in the US$2,500″, he detailed.

According to Echeandia, the pricing of these products is governed by the fundamental principles of supply and demand. This is because many fashion items streetwear They share two key characteristics: scarcity and exclusivity.

“In the case of sneakers, there are sizes that can be worth US$500, but if there are few numbers in that pair, they can be worth much more, being exactly the same model, they can reach up to 15 times their launch price because they are more limited”, accurate.

Streetwear pandemic

The Pimp CEO further noted that, Contrary to what might be expected, the time of the pandemic did not slow down its growth, but rather boosted it. This is largely due to the fact that the majority of their sales are made through online platforms. e-commerce.

“We have been there since before the pandemic and I can say that it did not affect us at all because we had the ability to concentrate on e-commerce with low operating costs.which allowed us to operate according to the guidelines offered by the State at that time,” Indian.

Jorge Coronado, general manager of Future Visionsa brand dedicated to the sale of streetwear clothing since 2018, added that in the same way, The pandemic represented a stage of growth for its brand.

“We faced the pandemic in a stage of growth, where the digital channel was boosted in sales due to the need for consumers to purchase products from home with the comfort of urban fashion and seeking to feel different made consumers wear more clothing items. this style”, he added.

What are customers looking for?

The executive of Future Visions pointed out that the consumer trend towards streetwear and urban fashion constantly evolves between the generation Z and the Millennials.

“(This occurs) because the client seeks to differentiate themselves through their style. Today in sneakers, the trend of the 2000s (Y2K), Retro Running, Skate and Basketball, among others, are setting the pace in 2023. The most significant change is in the atomized offer of clothing brands where they seek to print and connect through the style of the creator to the consumers”, he pointed out.

Regarding the average sales ticketsthe executive of Future Visions He pointed out that this can be around S/ 500, a differentiated figure compared to other segments with an average price between S/ 100 to S/ 200.

Due to various factors such as inflation, product changes, additional costs, and freight price increases during the pandemic, prices have seen an increase over time.

According to Christian Echeandia of Pimp, a fundamental element in the decision making of streetwear fashion clients is the aspirational factor.

“There will always be expectation and speculation about collaboration with important artists, people who have transcended in one way or another, and that the user who buys it feels identified. Whoever buys that pair does so far from quality, model or design.. Proof of this is that there are items that – in my opinion – may be very ugly, but have very great resale value,” argument.

On the other hand, the founder of the Chiclayana brand Pimp, said that the main problem that local brands face is that “They forgot how important the concept is for streetwear stores, that they tell the stories.”

The resale business

“First of all, (the business) is based on the fact that they are exclusive products, and as such, the idea is that they always have a limited stock. For example, Nike either Adidaswhen they compete, beyond just selling the pair, it is who best tells the story of their product. They look for that, that the collaboration is well accounted for. Then there is the resale business, where people can have small stores and from USA They import launch products that can be highly requested locally”, said in relation to stands out (resale in English) of footwear streetwear.

An illustrative example is the sneaker models that, at the time of their launch, may have a retail price of US$250. However, After their initial release, the value of these same sneakers can increase significantly, reaching prices that are 20 or even 30 times higher than their original price..

This phenomenon explains why, when a brand announces a new streetwear product, it can generate high demand and can be difficult to acquire.which translates into queues both in physical stores and on virtual purchasing platforms, where enthusiasts seek to ensure they obtain these products.

Future Visionsa Peruvian brand with four stores in Lima, is one of the few stores authorized for direct launches of footwear and clothing streetwear.

“The objective of a collaboration is to join efforts between brands. In our case, the hype is that the expectation for valued and limited edition products enhances the exposure of the brands in a differentiated channel that adds experience and notoriety. (…) For example, exclusive drops like Bad Bunny with Adidas, New Balance with Bodega, Reebok with DC Comicsadded to launch experiences and events for the urban community, among others”, the executive noted.

And although the mark is not on the business resale, it is in the “wholesale”, that is, from the entry of the product into the national territory until its launch on the market. “In resale a lot depends on the valuation of the product and its scarcity”.

“The issue of streetwear in Peru is very low when talking purely about clothing. I would say that Peruvians generally prefer to invest a lot in sneakers. The topic of clothing is very short. In my experience, I have worked with clothing brands like Supreme, Vape, Off White, but it doesn’t come out much,” said the CEO of Pimp, who added that another challenge for the industry is to decentralize product launches, beyond Lima.

For Echeandia, the resale can offer a margin of return on investment that varies depending on the popularity and exclusivity of the shoe. In some cases, this margin can be as high as 40% to 45%. However, she also noted that sometimes the average margin could be lower, around 20% to 25%, especially if the product fails to meet audience expectations or generate the same level of enthusiasm.

New competitors

The founder of Pimp also shared his experience and concluded that the successful formula to enter this market is to focus on the regular sale of products at retail prices. with an average price range between S/ 300 and S/ 500.

“I would also try to put more exclusivity in the store, with tickets that can range from S/ 600 onwards. It is true that pairs with prices at S/ 1,500 or S/ 2,500 have less turnover, but bringing them makes you differentiate yourself from the rest of the stores”, argument.

Along these lines, other competitors enter the market to profile themselves in the outstanding business, such as CBO Shoeswhich with a personalized formula seeks to compete with department stores.

“The customer is now looking for a better shopping experience, a more personalized treatment, according to your personal tastes and style. This attention is not usually found in large department stores, since they focus on mass sales. Now we also work with free delivery services, both for the province and for Lima, and other types of express service.”said Javier Naupari, co-founder of the brand.