( 4UMF NEWS ) $300 Nike LeBron Sneakers:
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.
Even as shoppers scrounge for discounts, Nike is raising shoe and clothing prices by 5% to 10%. Plus, Nike is quietly changing the way it launches highly coveted new sneakers. Shelly Banjo has details on The News Hub. Photo: Nike.
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.
Nike unveiled the LeBron X, shown, at the 2012 Olympic gold-medal basketball game between the U.S. and Spain. Analysts expect that this 10th LeBron shoe will retail for around $315. The first edition, modeled after basketball star LeBron James, the Nike Zoom Generation, retailed for around $110 in 2003; the ninth edition retails for around $250.
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 quarterly decline. Nike’s margins are now lower than most of its direct competitors, rival Adidas and apparel maker Under Armour Inc.
The price increases, from a company whose trendy footwear sometimes generates long lines of avid buyers, may test even the most dedicated Nike fans.
“Prices are getting crazy excessive and as long as we continue to buy sneakers, Nike is going to keep increasing the prices,” said Donell Brown, 30, who owns a cleaning services company in Dearborn, Mich.
Mr. Brown said he and his friends have been posting messages on Twitter and YouTube, urging other longtime sneaker fans not to buy the pricier LeBron shoes and to forgo waiting in line for new sneaker releases.
Nike’s price increases are also being felt at the lower end: The venerable Converse Chuck Taylor All-Star sneaker now costs $50 compared with $45 a year ago.