How StockX CEO Scott Cutler is Building Sneakers Into the Next Big Asset Class
You can almost hear the brokers yelling across the trading room floor, scrambling to react as green and red lights flash furiously in the background. AJ1H-DM is down, sell! AF1L-SUPBLW is up! This is the virtual world that StockX founder Josh Luber first envisioned upon the company’s launch in 2016 and what CEO Scott Cutler has helped bring to fruition. It’s a world where sneakers and streetwear have ticker symbols and are commodities akin to those traded on the New York Stock Exchange—their values determined by the market (that is, sneakerheads), not brands. It’s a world that found a way to put an objective value on “hype” and galvanized the most passionate consumer base on the internet.
In the mid-1980s—after Nike launched Air Jordan and Adidas signed a ground-breaking endorsement deal with Run-DMC—the art of collecting sneakers quickly became a subculture of its own. As the community evolved, renowned rarities and deadstock became coveted treasures, secret cleaning techniques and custom alterations were shared only in tight circles, and shady swaps and out-of-control auctions turned the marketplace into the Wild West. Over the course of a few decades, it became clear that as impassioned as the community was, it required an infrastructure that would recognize sneakers as a rising asset class and equip its consumers with the agency to influence the market directly. Then, StockX was born.
“Our vision as a company is to be the leading global marketplace for consumers of current culture,” says Cutler. “One thing is true for all of these consumers: they want access to these products that you simply cannot find from the brands [and] retailers… It’s a really exciting and bold vision that we have as an e-commerce marketplace.”
This year, Cutler’s efforts amounted to the company surpassing $2.5B in lifetime gross merchandise value and a billion-dollar valuation the year prior. In just four short years, StockX has carved out a distinct identity in a rapidly growing market, led in large part by Cutler’s pedigree in both analyzing stock and resale markets. Formerly the executive vice president and head of global listings at the NYSE until 2015, Cutler went on to become the President of eBay subsidiary StubHub and later the Senior Vice President, Americas at eBay. It’s a storied career that eventually led him to StockX in 2019, a company that sits comfortably at the intersection of Cutler’s professional experiences.
Under Cutler’s tutelage, StockX has not only redefined how sneakers and streetwear are valued as investment pieces but democratized the e-commerce space entirely. Naturally, e-commerce has only become more prevalent as consumers opt for the convenience and safety of online marketplaces in a COVID-19 world. But StockX goes a step further, putting the power back in the hands of sneakerheads through a commitment to user experience, transparency, legitimacy, and flexibility.
“The traditional [supply and demand] dynamic is that a product is released, it’s set at a static price, and typically in a retail channel, it sells for that price. Seven days later, it’s marked down… and then it’s ultimately in the exhaust of the distribution channel,” explains Cutler.
StockX understands that, by and large, sneaker and streetwear communities are composed of an exceptionally knowledgeable clientele. Now, with the aid of social media, such communities have wandered from the margins of high fashion to centre stage. Research firm Cowan estimates that the sneaker and streetwear resale markets have grown upwards of $2B in North America, growing by at least 20 percent year-to-year with the potential to reach $30 billion globally by 2030.
What makes StockX so disruptive in the e-commerce space is that it puts the power back in the hands of the consumer, not the brand. The value of any given pair of Air Jordans or an Off-White industrial belt is never static, but instead constantly reacting to the demand for the product. Now, as the world adjusts to potential new realities of commerce, StockX’s online infrastructure is offering customers more agency than they’d ever had when visiting brick and mortar retailers.