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Oversupply of once-hyped sneakers like Jordans has caused resale prices to plummet, pushing smaller platforms out of the market and sending the bigger players scrambling to adapt.

Last fall, two of Europe’s largest sneaker marketplaces, Netherlands-based Restocks and France’s Kikikickz, filed for bankruptcy. To the casual observer, their failure appeared to come out of nowhere: Both companies continued to list Jordans and Yeezys for sale while churning out an endless stream of content on TikTok, right up until they shut down and sold off their assets to pay creditors.

To followers of the sneaker world, these platforms’ demise came as no surprise. For months, users of both sites voiced concerns over unfulfilled orders, unpaid refunds and overdue payments amounting to millions of euros. A Facebook group called “Anti Restocks.Net,” where people still share stories about the money and shoes they are owed, has 3,000 members.

The troubles at Restocks and Kikikickz weren’t isolated incidents, either. After a decade-long boom, the sneaker resale market is contracting. Nike has increased production of some of its most in-demand shoes, driving their value down in the secondhand market. Adidas has shuttered its Yeezy line, cutting off another critical source of supply.

Smaller resale platforms like Restocks and the private equity-backed Edit Ldn, which was sold in a fire sale last month, are being pushed out. The giants in the space — StockX, Stadium Goods and GOAT — have held their ground by diversifying into new categories, and through consolidation. GOAT’s acquisition of high-end streetwear platform Grailed in 2022 helped the platform become less reliant on sneakers, while StockX sells everything from trading cards to PlayStations.

But they’ve not been completely immune to market conditions. In January, StockX laid off 40 employees; its chief marketing officer, Deena Bahri, also left as part of the restructuring.

In the near-term, the prospects for sneaker resellers aren’t good. In 2023, overall trade volume across the secondary market was flat, but if prices continue to fall, then resale stakeholders of all sizes will feel the effects, according to Eric Witschen, founder of Neustreet, a platform which aggregates data from the world’s largest resale sites, including StockX, GOAT, Stadium Goods and Flight Club.

“It’s been a lot of pain for people that are in this resale market,” he said. “Selling high volumes is meaningless if it’s no longer profitable.”

The Fall of Hype Sneakers

Reselling became a big business starting in the 2010s, as sneaker giants embraced the scarcity model, where they would release limited-edition shoes in small quantities to drive hype around their brands. Prices for rare Jordans and Yeezys climbed steadily, then spiked during the pandemic.

But the market peaked towards the end of 2022. A relentless parade of collaborations and unimaginative releases of minor variations on the same retro sneakers was creating fatigue among even the most avid collectors.

Then, all of a sudden, the sneaker giants ramped up production. In the past two years, Nike has pumped out Jordan 1s and Dunks like never before, and New Balance followed suit with its 550 silhouette. Adidas flooded the market with millions of Sambas and Gazelles — a move that helped the brand cash in on surging demand. Meanwhile, it abruptly cut ties with Ye in 2022, and began selling off its remaining stock of Yeezys in big batches last year.

The cumulative effect on the resale market was devastating.

“At one point, Dunks were impossible to get at resale for anything less than three or four times the [original] price,” said Yu-Ming Wu, former chief marketing officer of resale platform Stadium Goods and co-founder of Sneaker Con. “Today, you can walk into any Foot Locker, any retail store, and get Dunks or Jordans [at] retail — or even better, on sale, which is crazy.”

Restocks and Kikikickz weren’t the only casualties. Most of the smaller sneaker resale platforms entered at the peak of sneakermania, and quickly ran out of funding as demand fizzled and high costs of borrowing made investors lose their appetite for speculative ventures.

The bigger platforms are better capitalised, but could run into trouble if the market doesn’t turn around, according to Dylan Dittrich, author of the book “Sneakonomic Growth” and head of research at Altan Insights.

“[They] will still be around, but I imagine their next funding rounds will be much harder conversations than before,” he said.

New Players on the Block

Today, rare collaborations and collector’s items — also known as “grails” — still fetch eye-watering prices and are major cash cows for the remaining resellers. The Fragment Design x Travis Scott x Air Jordan 1 Retro High (2014) sneakers were the most profitable sneaker for sellers on GOAT in 2023, regularly fetching over $2,000.

A new generation of sneaker brands are filling the void left by Nike and Adidas. The hottest sneakers today are made by newcomers like On and Salomon, as well as lesser-known brands like Mizuno, Merrell and Norda, which are at the forefront of the sportstyle sneaker trend — a fast-growing category that morphs the performance elements of trail, hiking and running shoes with fashion-forward attributes. On has an ongoing collaboration with Loewe, and Salomon’s tie-up with New York designer Sandy Liang has consistently traded at premiums on resale platforms.

While retro sneakers make up the bulk of primary and secondary market sneaker sales — the top-selling brands on GOAT in 2023 were still Nike and Air Jordan — growth in the overall category was largely driven by sportstyle shoes last year, according to the company’s annual trade data report. Sales of Asics’ Gel-1130 and New Balance’s 9060 sneakers grew by 1,176 percent and 744 percent respectively on StockX in 2023.

The newcomers have brought much-needed newness to the market, both in terms of appearance and material innovation, where Nike and Adidas have fallen short in recent quarters. But even so, these new styles are not enough to make up for the share vacated by Jordans, Dunks and Yeezys.

Although the hype may be over, sneakers have become a staple category in fashion. As long as there is continued innovation in the sector, sneakerheads say they’re certain the secondary market will eventually recover.

“There’s no question resale has been on a downward trend for the last year or so, but I believe as the general market recovers and consumers get less fearful, we’ll see resale values start to tick back up,” Wu said.

Neves, who launched Farfetch in 2008, is stepping down amid a slew of corporate changes and the exit of managers including Browns chief Elizabeth Von Der Goltz, and Kelly Kowal, head of Farfetch Platform Solutions.

LONDON — José Neves is stepping down as chief executive officer of Farfetch two months after Coupang and the San Francisco-based firm Greenoaks Capital purchased the e-commerce platform out of administration and pledged $500 million to help revive it.

According to a memo seen by WWD, Neves will remain at Farfetch in a consultancy role and will not be directly replaced as CEO. Going forward, the Farfetch business will be overseen by Coupang’s founder Bom Kim and the Farfetch executive team.

Neves’ move comes amid a slew of managerial layoffs at the company. Elizabeth Von Der Goltz, chief fashion and merchandising officer at Farfetch and CEO at Browns, and Kelly Kowal, head of Farfetch Platform Solutions, are among the top managers exiting the business.

A Farfetch spokesperson said: “As we assessed key priorities and resources across the business, we made the difficult, but necessary, decision to reduce global headcount and redundant roles.

“This decision secures the future of the business and as a result, Farfetch can now operate from a position of strength and focus on what we do best: deliver exceptional experiences for brands, boutiques and customers.”

More job cuts are expected to be revealed in the next few days.

According to the memo, Coupang wants to streamline the business, recover “financial strength and focus on what we do best: deliver exceptional experiences for brands, boutiques, FPS clients and customers. This new, better-structured organization will continue to move with speed to unlock the full potential of the online luxury space that Farfetch pioneered.”

The company said conversations with those impacted by the redundancies will start in Portugal on Friday and in the U.K. and other geographies on Monday.

Although Coupang did not specify the number of job cuts planned, it is understood that Farfetch had staffed up considerably during, and immediately after, the pandemic to deal with increased consumer demand.

In a memo issued to staff later on Thursday, and seen by WWD, Neves said that “after 15 years of dreaming up, creating and growing Farfetch,” his decision to step down was a difficult one, “but I believe the company is in great hands.”

He said the path that Farfetch is charting now “will help strengthen it. As I step away from the CEO duties, I will be celebrating together with you every success that Farfetch achieves for many years to come.”

Neves founded Farfetch in 2008, and six years later the company became one of the U.K.’s few unicorns with a $1 billion-plus valuation. Over the years, Farfetch would become a $24 billion company, but all that unravelled in the final quarter of 2023, leaving Neves, and his remaining investors, out of pocket.

Once a feted entrepreneur who had dreamt of democratizing fashion online and enabling retailers and brands — no matter how large or small — to reach worldwide audiences, Neves fell victim to his own management fumbles, and to certain events beyond his control.

Russian sanctions, China’s long road out of lockdown, and spiralling inflation and interest rates all took their toll on Farfetch and on tech companies generally.

An online luxury retailer that had yet to turn a profit, Farfetch was all of a sudden seen as vulnerable, and shareholders began to panic. The end result was a pre-pack administration and distress sale to Coupang.

Some investors still recognize his achievements, and describe him as a trailblazer in the still evolving world of e-commerce.

Danny Rimer, a partner at Index Ventures, an early investor in Farfetch, called Neves a “very special founder and an exceptional entrepreneur.” He said Neves had a clear vision of what the industry could achieve and the role that Farfetch could play in the wider ecosystem.

While Rimer acknowledges that certain things “could have been done differently” at Farfetch, he said the platform made a significant impact on the fashion industry, and on e-commerce as a whole.

Another significant, early-stage investor who spoke on condition of anonymity said Farfetch was the victim of “black swan” events, including trade tussles between the U.S. and China and the war in Ukraine.

The investor admitted that Farfetch was also the victim of poor management and balance sheet oversight. Debts and overheads were too high, and expansion plans were too aggressive.

“Still, José was an incredible visionary with a work ethic and willpower to match. He was very generous with his team, and a loyal, broad-minded leader,” the person said.

Carmen Busquets, another early-stage investor, had been hoping to raise between $500 million and $1 billion to rescue Farfetch last year, and had proposed a five-year plan with the aim of driving fast growth and profitability.

“Farfetch remains the leading company in the industry. It has driven fundamental change to the distribution of fashion globally over the last 15 years,” Busquets told WWD in December.

She described it as a “strategic asset, and given the collapse in market confidence and valuations in the sector there are a number of tie-ups and consolidation opportunities for Farfetch as a leading e-commerce platform for the 21st century.”

Coupang first revealed its purchase of Farfetch on Dec. 18, and since then the company has taken full control of the London-based platform, which was delisted from the Nasdaq as part of the sale.

A Fortune 200 company, Coupang is listed on the New York Stock Exchange. It has e-commerce operations and support services in markets including South Korea, Taiwan, Singapore, China and India.

It compares, albeit on a smaller scale, to Alibaba in China and has been looking to move upmarket, and into fashion and luxury goods services.

Coupang has promised that Farfetch will continue to serve its more than 4 million customers worldwide and said it wants the platform “to pursue steady and thoughtful growth.”

According to sources, Coupang has been taking a “no-nonsense, granular approach” to understanding the Farfetch business as it attempts to streamline operations over the past two months.

Going forward, marketing spend will be diverted to “driving transactions” rather than building the Farfetch brand and image, the sources said. FPS, which works with Farfetch and third parties on software and technology, will remain a core part of the business.

Negotiations to sell noncore assets in the Farfetch portfolio, such as Browns and New Guards Group, are understood to be ongoing.

As reported, Style Capital is eyeing the acquisition of New Guards Group, according to Roberta Benaglia, founder and CEO of the Italian private equity firm.

In early December, WWD reported that Browns was also in play, and that Mike Ashley’s Frasers Group was an interested buyer. Frasers has since bought Matches, another fashion tech company that saw its valuation plummet last year amid a slew of macroeconomic challenges.

As reported, there is an ad hoc group of Farfetch bond holders disputing Coupang’s purchase of Farfetch, and they have taken their battle to a Cayman Islands court.

They are demanding more than $400 million in funds, and want the holding company that had been set up to facilitate Farfetch’s 2018 listing on the New York Stock Exchange to be liquidated.

The bond holders, who are in possession of more than half of Farfetch’s 3.75 percent convertible senior notes, due in 2027, have filed a “winding-up petition” on the grounds that Farfetch Limited is unable to pay its debts.

Even before the legal action, Coupang confirmed that the Cayman Islands shell company would be wound down as part of the delisting of Farfetch.

- If anything recent events strengthen dollar's status

- Several factors weigh against Yuan as an attractive asset

- Recent commentary warning of a possible decline in the status of the U.S. dollar raises concerns about the effects of sanctions against Russia, U.S. political dysfunction, the rise of digital assets, and China's efforts to bolster usage of the renminbi.

- I do not expect to see the U.S. dollar lose its status as the world's reserve currency anytime soon, nor even see a significant decline in its primacy in trade and finance. Recent developments that some have warned could threaten that status have, if anything, strengthened it, at least so far.

- No need for a central bank digital currency in the US

- We don't want banks holding large amounts of crypto ETFs

- Intelligence community has serious concerns about a broad declassification of this Intel

- US knowledge of such Russia capability goes back a long time

‘Potent’ antibiotic drug boosts fight against superbugs

New molecule proves effective in animals against several drug-resistant bacteria

Scientists have invented a potential drug candidate that successfully combats antibiotic-resistant “superbugs” in non-human tests, according to research.

The new antibiotic, known as cresomycin, is effective in mice against several bacteria that cause serious infections and are increasingly resistant to existing treatments, said a paper published in Science on Thursday.

“What is most important is that it kills antibiotic-resistant strains in animals,” said Yury Polikanov, co-author of the research and an associate professor of biological sciences at the University of Illinois Chicago. “It’s more potent [than its predecessors] — and more potent against deadly bacteria.”

Cresomycin’s synthesis is part of urgent research efforts to defeat anti-microbial resistance (AMR), which occurs when bacteria, viruses, fungi and parasites evolve the ability to resist treatments.

AMR, largely caused by excessive use of antibiotics, is already linked to 5mn deaths a year, according to the World Health Organization. Hospitals are particularly susceptible to the spread of superbugs.

Cresomycin proved effective against a range of dangerous bacteria prominent in the spread of AMR, the paper said. These include: Staphylococcus aureus, which causes infections in the skin and other organs; Escherichia coli (E-coli), responsible for intestinal and urinary tract illnesses; and Pseudomonas aeruginosa, a trigger of blood and lung infections.

A big obstacle to dealing with AMR is that decades of under-investment in research has led to a lack of promising new synthetic antibiotics. Healthcare has long benefited from treatments derived from natural products, such as penicillins and cephalosporins obtained from moulds, but these are becoming increasingly ineffective as pathogens evolve to beat them.

The cresomycin paper’s authors acknowledged that the antibiotic problem was “daunting” but said their findings boosted hopes for “the future discovery of antibacterial agents broadly effective against AMR”.

The researchers took an existing antibiotic as cresomycin’s inspiration but then remodelled it and added extra features to deal with the changes AMR had caused in the target pathogens, Polikanov said.

The cresomycin test results looked “promising”, said Tim Walsh, an Oxford university professor and AMR expert. More data would be needed on the molecule’s effectiveness against the group of so-called Gram-negative bacteria, which are protected by an outer membrane and are a central problem in the spread of AMR, Walsh added.

“Until it is further scrutinised, it is difficult to predict the value of this new antibiotic against serious Gram-negative infections as a singular therapeutic,” said Walsh, who was not involved in the study. “But the elegant synthetic design of cresomycin, based on an intuitive rationale, provides an exciting scaffold for further development.”

Swiss pharmaceutical company Roche is conducting phase 1 clinical trials on an antibiotic that successfully targeted a Gram-negative bacterium known as carbapenem-resistant Acinetobacter baumannii, or Crab. Scientists said the candidate drug’s discovery, unveiled in a paper last month, could be the basis for research on whether it could be reformulated to target other antibiotic-resistant pathogens.  

Crab, which causes life-threatening illnesses in hospital patients, is classed as a priority concern by the WHO and an urgent threat by the US Centers for Disease Control and Prevention.

GDP fell 0.3% in final quarter of last year, dealing blow to Rishi Sunak’s election campaign

The UK slipped into a technical recession at the end of last year, dealing a serious blow to Rishi Sunak’s pledge to “grow the economy” as households and businesses continued to rein in spending amid the cost of living crisis.

Gross domestic product fell 0.3 per cent in the final three months of 2023, following a 0.1 per cent decline in the third quarter, according to data published by the Office for National Statistics.

The figures look worse if you take into account the increase in the UK’s population. Output per head contracted 0.7 per cent in 2023, falling in every quarter last year and failing to grow since the start of 2022.

James Smith, Resolution Foundation research director, said: “Britain has fallen into recession and a far deeper living standards downturn.”

The figures create a challenging backdrop for chancellor Jeremy Hunt as he considers slashing billions of pounds from public spending plans in next month’s Budget to fund pre-election tax cuts. However, having raised Tory hopes of tax cuts in the past few weeks, Hunt is now trying to suppress them.

Labour claimed the prime minister’s pledges on the economy were “now in tatters”. Shadow chancellor Rachel Reeves said: “The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off.”

But Hunt insisted there were signs the British economy was “turning a corner”.

“Forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low,” he added.

This week Andrew Bailey, BoE governor, warned against putting “too much weight” on the economy slipping into a technical recession as it was expected to be “very shallow”.

Two consecutive quarters of contracting GDP is defined as a technical recession, though many economists believe stagnation is a better description without a more sustained downturn.

Markets are now pricing in around three quarter-point interest rate cuts by the Bank of England this year, with a 65 per cent probability of the first cut being delivered by June.

Interest rate-sensitive 2-year gilt yields were roughly flat at 4.56 per cent, while the FTSE 100 index of blue-chip stocks rose 0.4 per cent. Sterling rose 0.1 per cent to $1.258.

Economists polled by Reuters had forecast the economy would contract by 0.1 per cent in the final quarter as high borrowing costs, inflation and strikes hit activity.

In 2023, the economy largely stagnated as it grew only 0.1 per cent. This was well below the 2.5 per cent expansion registered in the US, and weaker than the 0.5 per cent growth of the eurozone.

The data comes as the Tory party risks losing two seats in by-elections on Thursday in Wellingborough in Northamptonshire and in Kingswood near Bristol.

The ONS said all the main sectors of the economy fell in the final quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery.

There was a fall in the volume of net trade, household spending and government consumption in the quarter, only partially offset by an increase in investment.

The ONS said output in December was down 0.1 per cent from the previous month, softer than the 0.2 per cent contraction forecast by analysts.

Sanjay Raja, chief UK economist at Deutsche Bank, said the contraction in the fourth quarter represented a “meaningful miss on GDP” for the BoE’s Monetary Policy Committee.

“There’s clearly more spare capacity in the economy than assumed in their recent projections,” he said, adding that the data would “no doubt become uncomfortable especially with the bank rate at highly restrictive levels”.

The BoE this month upgraded its forecast for 2024 growth, which it now says will be 0.25 per cent — up from its previous prediction of zero growth. It forecasts 0.75 per cent growth for 2025.

The GDP figures follow UK inflation data published on Wednesday that showed price growth at 4 per cent in January, the same rate as December and lower than forecast by the BoE.

However, on Tuesday official data also revealed that pay growth was still strong, raising concerns about the persistence of underlying price pressures.

Estimate of Russian use suggests Moscow is eroding a major Ukrainian battlefield advantage

KYIV—Ukraine’s top military-intelligence officer said Russian invasion forces in his country are using thousands of Starlink satellite internet terminals, and that the network has been active in occupied parts of Ukraine for “quite a long time.”

Lt. Gen. Kyrylo Budanov’s comments in an interview suggest that Russia is starting to acquire Starlink terminals, made by Elon Musk’s SpaceX, at a scale that could cut into a major Ukrainian battlefield advantage. Ukraine’s government said last year that around 42,000 terminals are used by the military, hospitals, businesses and aid organizations.

Starlink, which is more secure than cell or radio signals, is considered so vital to Ukrainian operations that the Pentagon struck a deal with SpaceX last year to help fund access for Kyiv’s forces. Up to now, Russian forces have had no similarly secure communications system.

Russian private firms buy the terminals off intermediaries who pass off purchases as for personal use and deliver the equipment to Russia via neighboring countries, including former Soviet republics, Budanov said. Russian army units down to company level were seeking to acquire Starlink terminals, often by collecting money for the purchases, he said.

“It’s an open market,” said Budanov, who heads Ukraine’s military-intelligence agency, known as HUR. “It’s not a military item.”

A search for Starlink terminals on Russian search engine Yandex.ru yields numerous dealers in Moscow and outside the Russian capital who promise to install the systems across the country and the Russian-occupied territories of Ukraine.

One website, strlnk.ru, promised “tested performance” in the occupied areas of Crimea, Luhansk, Donetsk and Kherson with monthly fees starting at $100 a month. The website provided contacts for a dealer, including a Russian cellphone number and a Yandex email. A representative of the firm declined to speak to a Wall Street Journal reporter.

Another website that uses the name of a German appliance company sells Starlink terminals for nearly 300,000 rubles, or just over $3,000.

Like other space communications systems, Starlink relies on satellites in orbit, infrastructure called ground stations and terminals to allow people to tap in to its high-speed internet connections. Customers use a flat antenna array that needs an unobstructed view of the sky to connect with satellites.

SpaceX, which doesn’t want to provide connections to users in countries where regulators haven’t permitted its use, wields significant control over where it offers service and where it doesn’t.

Budanov said Starlink service has worked on occupied territory for “quite a long time,” without elaborating. Asked whether he knew from personal experience, he replied: “Of course.” HUR units often work behind enemy lines.

A spokesman for SpaceX didn’t immediately respond to a request for comment. Musk previously said SpaceX wasn’t selling to Russia. “To the best of our knowledge, no Starlinks have been sold directly or indirectly to Russia,” he wrote in a post on his social-media platform X on Sunday.

Neither Musk nor Starlink has responded directly to questions about whether the devices could be obtained in other countries and used in Russian-occupied parts of Ukraine. Starlink has said SpaceX takes steps to deactivate Starlink terminals if the company determines sanctioned or unauthorized parties are using them.

The Russian Defense Ministry didn’t respond to a request for comment. Kremlin spokesman Dmitry Peskov said earlier this week that officially Starlink was neither delivered to Russia nor used in the country.

The Kremlin has steadily tightened its grip on Russia’s communications infrastructure over the last decade. Current regulations force any foreign satellite operator in Russia to pass traffic through one of several ground stations inside the country. It was unclear whether any Starlink traffic abided by those rules. Exceptions can be made only with permission of the country’s Federal Security Service, or FSB.

Access to Starlink has been a politically charged issue since early in the war, when Musk made the service available in Ukraine.

Sen. Ron Wyden (D., Ore.) said in a statement that reports of Russian military use of Starlink terminals were extremely concerning. “SpaceX needs to do everything in its power to ensure the Russian military isn’t using its technology as part of its invasion of Ukraine,” he said.

Last year, when SpaceX said it could no longer fund access for Kyiv, the Pentagon agreed to pay to help keep the service running. Private donors, governments and other organizations also pay for terminals.

Musk said in September that earlier in the war, he had declined a request to activate Starlink service around Sevastopol in Crimea to avoid directly involving his space company with what he described as a plan to sink Russian ships there.

Musk said that if he had agreed to it, SpaceX would have been “complicit in a major act of war and conflict escalation.” He didn’t address how this was different from Ukraine’s use of Starlink in many other operations.

Reports on Russian use of Starlink come as Musk has spoken out against further aid to Ukraine, saying on Monday that it would prolong the war and cause more deaths as “there is no way in hell” that Russian President Vladimir Putin could lose the war.

During the discussion in a forum on X, Musk acknowledged that he has been accused of being an apologist for Putin, but called that absurd, pointing in part to the support Starlink has provided to Ukraine.

Asked about Musk’s views on the war, Ukraine’s military-intelligence chief Budanov said: “That’s his personal matter.”