Sneaker Investment Platform Rares Introduces Secondary Market Trading

“Investing in culture” – this is the core concept of Rares, a sneaker investment platform created by former NFL player Gerome Sapp.

The platform allows users to invest in sneakers as they would in typical stocks and offers sneaker enthusiasts an alternative to simply reselling shoes. In a chat with FashionUnited, Sapp said the concept gives “people access to cultural relics that have kind of turned into investment assets.”

“We feel like the cultures and communities that made these assets what they are were at some point excluded from the appreciation of their value,” Sapp added. “Rares is the platform that welcomes them back and allows them to participate in the secondary value of a market they made popular and valuable.”

Now, the platform is expanding its capabilities with the introduction of the secondary market, allowing users to trade stocks with others, which it says will increase liquidity as trading volume continues to grow. To kick off the new feature, Rares will be showcasing the Shova 2010 Air Force 1 Hov, a Nike shoe made in collaboration with Jay-Z, with new styles to be unveiled on the platform as each pair sells out.

Secondary trading is the first of many announcements to come in 2022, the company said, as it considers a potential new round of funding and the introduction of new asset classes to its offering.

Speaking to FashionUnited, Sapp gave insight into where the Rares concept came from, how valuable the sneaker market is and what to expect from this innovative idea.

Image: Rares, Gérôme Sapp

Can you tell me a bit about your background?

The Rares story really has to start in Houston, Texas, where I grew up as a single mom. I had experienced what a lack of access and opportunity really meant. I’ve always wanted to bridge the chasm between the two.

My passion for sneakers was born when my father went to prison. He bought me my first pair of Air Jordan 4s and from then on I was hooked. I’ve always been a fan of Michael Jordan and what he meant to the black community. Wearing Jordans meant success, it was more than just a sneaker.

I always knew growing up that the sneaker would go up in value, unlike other shoes. I knew it was a special asset class.

I was lucky enough to get an athletic scholarship to the University of Notre Dame, where I studied finance and played American football. I worked at Merrill Lynch over the summer, where I started to dive into corporate finance, but was more interested in derivatives and other types of complex financing.

Fortunately, I was drafted into the NFL and played for six years, but during the off seasons I spent my time at Harvard Business School, in a program focused on finance and entrepreneurial studies. It was the first time I really started to think about alternative assets.

Where did the idea for the platform come from?

Ironically someone stepped on my Air Jordan 11s on my way to class and I remember wiping my shoe and thinking “there must be a better way to squeeze value out of this sneaker besides carry her”.

I knew that sneakers were already a fast appreciating asset class, they appreciated faster than gold and rivaled traditional stocks in terms of return on investment. So I thought, what if you could turn that into a stock and allow people to invest in sneakers the same way they would a stock. As the value of the sneaker increases, the value of the shares you own in that sneaker also increases.

So, the sneaker market naturally suited you compared to other markets?

Absolutely, it was a natural conversion of my passions: sneakers and finance. I know sneakers like most people do, regardless of their day job. And I’ve spent my whole life in finance actually. So it was natural for me to mix those two things.

Even though Rares will be moving into other alternative asset classes soon, the sneakers were the ones I was familiar with and most of my team were familiar with. It’s the one that got people excited the most because sneakers are not only a worthwhile asset class, but they’re fun to collect. It excites different emotional passions in people.

How does the platform work then?

We basically created the first real stock market for collectible sneakers. We do this by allowing you to invest in fractional ownership of historically beloved sneakers. You can come to our platform, like you would to any other market where you go to make an investment, you choose a sneaker you like and then you just invest in it.

The types of sneakers that we have on our platform are those that are historically popular. The sneakers we deal with have generally given a 90% return on investment. Everything on our platform is something that we believe will make money for our investors. When diversifying their investment portfolio and thinking about sneakers, making money must be one of the things they consider.

Image: Rare

Who is the platform aimed at and who does it generally attract in the end?

Our demographics are 20 to almost 40 because we tap into a lot of different things. First, we harness people’s desire to make money in new ways. After the pandemic, people realized that the stock market was just the stock market. A lot of people don’t really understand it and a lot of people have lost money on it. Many people are looking for alternative ways to make money through investing in alternative assets. We bring together people interested in other ways to diversify their investment portfolio.

Then we have a large group of sneakerheads — in fact, six billion people — who, in the real world, flip sneakers all day for cash. They buy it low and sell it high. We just made their job easier. We attract that part of the sneaker community.

But also, there are elderly people who use our platform for its nostalgic side. They invest in a piece of their past happiness that was found in a pair of tennis shoes. This is a broad demographic, but the number one reason people come to our platform is to potentially make money investing in sneakers.

Do you think it goes beyond money?

With alternative asset investing, it really taps into a personal connection. As I mentioned, the stock market for a lot of people, especially Gen Z, the next generation to come, they don’t really understand it, and for a lot of them they don’t really think the market fellow wants them to figure it out. But, when you start talking about alternative assets, things they know, things they can digest, there’s a certain connectedness that they feel comfortable investing in.

In a survey, 79% of Gen Zers admitted to looking for alternative asset investment platforms to invest money online. People are looking to diversify their investments into things they are comfortable with that are fractional and allow them to own a piece.

What shoe styles have you found to be the most popular? Do you often see connections between cultural values ​​and movements?

The biggest are the Air Jordan 1s, specifically the 1985 Jordan 1s. These shoes are classic and they will always go up in value. These are the benchmark in the sneaker industry, simply because of the way the shoes are made. It was the shoes that really created this sneaker craze.

However, in reality, if it is a collaboration with an artist like Jay-Z or Kanye West, it really has an effect on the resale value of the sneakers. What an artist does in the real world has a dramatic effect on the value of the sneakers they own in the secondary resale market. For example, one of our best-selling sneakers was a collaboration with Jay-Z and Air Force 1. Jay-Z made his money in music, but now he does it on the corporate side of music. People like him. So when we offered this sneaker for the IPO, this sneaker sold out in a day, simply because of the collaboration the sneaker was with.

Do you specifically connect with these brands for the market?

We do in some ways, but we don’t connect with the brands when we put the sneakers on the platform. Brands are disconnected from what we do, even though they are connected in many other ways. We simply find the best shoes that we believe will be most appreciated by our investors and put them on the platform. From now on, we buy these shoes and then offer them for investment. But, eventually, we will open the platform to the community to add resources themselves.

Image: Rare

With your successful funding round last year, what plans did you set out to pursue and have you already put some of those plans into action?

The most important thing is simply growth. Growing our team, growing our product offering and being more competitive in the marketplace. We have already started to grow our team and we continue to grow it, and we are also starting to roll out new product offerings. We’ve started hitting some of the milestones we had planned for the funding round and we’re also gearing up for another funding round – that’s how fast we’re growing.

You mentioned earlier that you plan to extend the offer to other markets. Can you share the ideas you had in mind?

I think one of the most important and broadest answers I can give you is that any alternative asset class is a game. Whether you’re talking about vinyl records or trading cards or even non-fungible tokens ( NFT). We are really looking to evolve and become the Amazon of alternative asset investing. We want people to be able to come to Rares and find what they want in terms of an alternative asset and invest in it and feel comfortable that that investment is making money for them. That’s what we’re going to eventually evolve into and we’ve already started laying the groundwork for that.

Whether you are a collector and want to put assets on the platform – we authenticate it, we secure it for you – or we continue to branch out and put additional alternative asset types on our platform, we want so people can come to Rares, click on a category and find sneakers, handbags, vinyl records and invest in them.

Our biggest goal is to make money for our investors and make them feel like when they come to Rares they have options, fun options. Ones they can relate to, not just from an investment perspective, but from a personal perspective. Things they find interesting.

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