The burgeoning romance between luxury fashion and streetwear is continuing to heat up, as high-end department stores ramp up their pursuit of brands beloved by hypebeasts in order to stay afloat.
The latest to join the trend is Nordstrom, which turned heads last week when it announced it will team with the streetwear consignment company Stadium Goods. The brand, which specializes in rare and limited-edition sneakers, will host a concept shop within Nordstrom’s forthcoming standalone men’s store opening next month in Manhattan.
“Nordstrom, specifically, has such an eye on innovation, and how to make the [shopping] experience better for their customers and present new and innovative things through retail and online,” said Stadium Goods CEO John McPheters. “On a basic level that resonates with us tremendously. There’s also a premium luxury value proposition of Nordstrom; they represent an incredible level of aesthetic and service.”
While Nordstrom has forayed into partnerships with sneaker brands in the past, including Adidas Originals and Greats, the integration of Stadium Goods demonstrates a deeper dedication to its streetwear merchandising strategy. It mirrors efforts from competitors like Bergdorf Goodman and Barneys, which are being more strategic in how they select inventory and what brands they stock on their shelves. As streetwear continues to infiltrate luxury fashion — propelling designers like Virgil Abloh to fashion houses like Louis Vuitton and spurring unlikely collaborations like Gucci Ghost — luxury department stores are seeking the guidance of these buzzy brands to stay relevant.
Now that streetwear has ballooned into a $300 billion global industry, the intention of these retailers is clear: They all want a piece of the growing streetwear market.
Merchandising for the modern man
According to retail analytics firm Edited, ultimately the major motivation for retailers to woo streetwear partners is consumers are spending more on these products at higher sellout rates.
“Streetwear brands are good at gathering momentum through scarcity of product and exclusivity of price point, which is working well to attract consumer demand,” an Edited spokesperson said.
According to Edited data, streetwear and sneaker inventory across luxury department stores such as Nordstrom, Bergdorf Goodman and Neiman Marcus sells out at an average rate of 134 days, compared to 251 across other apparel categories. Additionally, only 17 percent of the total product is currently discounted, at an average of just 22 percent off the full retail price.
In recent years, this has transpired to a significant shift in the way department stores select inventory. While Bergdorf Goodman had long solidified itself as a launch pad for traditional luxury brands like Tom Ford and Moncler, streetwear remained relatively untapped. In response, it hired new talent like Melissa Lowenkron as svp and general manager of menswear, who took risks with brands like Kith. The streetwear powerhouse began retailing at Bergdorf Goodman in 2016 and continues to perform well at the store; since Bergdorf Goodman debuted 28 new Kith products on its website in October 2017, 85 percent of the inventory has sold out.
Others, like Barneys, have developed their own exclusive product drop events. Last year, the department store partnered with Highsnobiety on a shopping event that included 30 exclusive capsule collections and product debuts. The featured products and brands were curated by Highsnobiety, and included Off-White, Heron Preston and Amiri, among others.
Jorge Valls, Nordstrom Men’s designer buying director, said pursuing sneaker and streetwear brands is an extension of the company’s effort to diversify inventory to meet demands of a growing luxury menswear market. According to a report by Euromonitor, the menswear industry is expected to be valued at $460 billion in the global apparel market by 2020, growing at a faster rate than the women’s market at 2.3 and 2.2 percent respectively. As a result, Nordstrom has worked to include a wider assortment of brands in recent seasons like Balenciaga, Gucci, John Elliott, Raf Simons, Stone Island and Rhude.
“Streetwear is an incredibly important trend in men’s fashion right now, especially with younger guys,” Valls said. “Our hope is that any guy can come into our store and incorporate the streetwear aesthetic into his wardrobe at every price point.”
Streetwear brands widen their horizons
For Stadium Goods, entering Nordstrom is largely a experimental venture for the brand. Unlike Stadium Goods’ existing resale model, which has thrived on buzzy consignment drops of exclusive, hard-to-find items that sell out almost instantaneously, the Nordstrom shop will feature an assortment of best sellers from previous months. While this will cut down on hype, the products will be updated weekly to stay fresh. (However, Nordstrom will not accept third-party shoe drop-offs.)
“It’s going to be a curated selection that is driven by data, including the most popular styles we have, but not from the past few months,” McPheters said. “It provides a little bit of a buffer between the two business models, so that we can present a new experience and coexist with the [Nordstrom] brand.”
Though a traditional retailer of this scale seems almost antithetical to the way Stadium operates, McPheters said the intent is for the two to work collaboratively to drive their respective sales. Featuring hard-to-find styles allows Nordstrom to still raise its cool factor while preserving the autonomy of Stadium Goods’ original model.
“There’s a piece of this that is us playing in [Nordstrom’s] ecosystem and making sure it’s a smooth experience for everyone. We’ll be positioned around other large brands, and it’s important that we handle it a little differently, where we can sell anything, at any time,” he said.
The ultimate goal for Stadium Goods is to gain visibility across a wider range of consumers that goes beyond the traditional streetwear shopper. McPheters said that when it came to choosing a retail partner, he was drawn to Nordstrom’s track record of innovation, both in store and online.
“Sneakers have transcended to mass, even though there are varying degrees of interest in the product,” he said. “We see a hype-driven and niche consumer in the store, but our [site] is definitely a mass, e-commerce vehicle. The Nordstrom customer is very fashion forward and is a much different audience, but how our product resonates with that audience will be a huge part.”
Chris Paradysz, founder and CEO of PMX Agency, said the overall convergence of sneaker culture and fashion over the past two decades in particular has helped drive the rising intersection of streetwear and luxury. As the concept of “luxury” has shifted away from flashy, ostentatious goods at exorbitant price points to more accessible products that extend into the lifestyle realm, it’s provided a rife opportunity for emerging streetwear companies.
“Sneakers were always a passion brand, then it became fashion, which is really what gave it a heartbeat,” he said. “Supreme is a great example of a streetwear version of that phenomenon, where it became fashionable years ago with the hip-hop growth in the early ’90s. But it really became fashion, much more broadly, and a passion for an audience of people, as it became more legitimized by digital activation.”
While the viability of mass retailers like Nordstrom to become legitimate destinations for streetwear style remains to be seen, Paradysz said it will need to prove the ability to engage both sneakerheads and traditional luxury shoppers. Ultimately, it will come down to smart product selection and mindful marketing, he said.
“They need to have a killer collection. From an experiential point of view, Nordstrom needs to keep it all about the service — playing really cool videos, giving it an urban feel, models walking through trying on product, maybe some tech. It needs to have a vibe and a pulse,” he said. “But it’s really all about the sneaker. Really fun designer kicks are great to find. It’s that thrill-of-the-chase feeling that they need to maintain.”