Does your teenage son exhibit all the warning signs: the surreptitious texts and phone calls, the unexplained influx of cash, the constant need to leave suddenly to go “meet a friend”? Could he be dealing?
Perhaps, but it’s not what you think.
We’re not talking drugs here, but the 2019 update: sneakers. A new breed of enterprising young men is leveraging the fashion world, seriously depleting their classmates’ wallets in the name of profit and social standing—and it’s all perfectly legal.
Fifteen-year-old Mitchell Sozio is one such budding entrepreneur. Inside his family’s tastefully decorated Upper East Side apartment on a prime stretch of Fifth Avenue, in a closet dedicated exclusively to his sneaker collection, two towers of shoe boxes soar high above his 5-foot-6-inch frame. Truth be told, “closet” isn’t exactly the right word; it’s more a walk-in shrine to hype footwear—hype, of course, being teen parlance for shoes cool enough to draw a passerby’s attention or, more important, to garner likes on social media.
To Sozio and his friends, the unassuming brown cardboard boxes are instantly recognizable as vessels for Yeezy, the sneaker line designed by rapper Kanye West for Adidas. “These boxes come in and out when a new shoe releases,” Sozio explains, wearing a black James Perse T-shirt and Nike sweatpants—a sporty-minimalist outfit that allows his pair of the shoes in highlighter yellow to really shine. “I only ever keep a few pairs sitting. I usually sell them immediately, because people have preordered them.”
This day was active, as there was a rerelease of a sought-after style, the Yeezy 350 V2s, which first launched in 2016. “I was really busy today, juggling school and these orders,” says Sozio, a freshman at the Birch Wathen Lenox School. “During my free periods, I’m always doing this.”
In the secondary market that has arisen, Sozio and his ilk can flip the shoes for vastly inflated prices, sometimes selling a pair for 10 times as much as the $200 retail price.
For Sozio it all started less than three years ago, when he was in sixth grade and the popularity of sneakers and hypewear exploded. “I started to pay attention to it, and to Yeezys,” he recalls. “I really wanted to get a pair. That was the main goal of everyone in the grade. If you had those and they were real, that was the top.”
He managed to get his hands on some Yeezy Boost 350 Pirate Blacks through a dealer. Afterward, as he wore the eye-catching advertisement laced up on his feet, classmates began to ask him if he could get them a pair, which is when the idea of flipping sneakers for a profit wormed its way into his consciousness. Some people saw dope shoes; Sozio saw dollar signs.
He’s hardly alone among New York’s privileged private-school set. Take Max Brody, a 17-year-old senior at Riverdale Country School in the Bronx. Brody resells clothing from the popular New York–based streetwear brand Supreme and, sometimes, sneakers made by Nike in collaboration with the label Off-White, which is led by designer Virgil Abloh, who is also the creative director of menswear at Louis Vuitton.
Brody, who lives in Scarsdale, New York, caught the bug as a freshman, when he used his winnings from a fantasy football league to buy two pairs of previously worn Nike Air Jordans (an Air Jordan 4 “Toro Bravo” and an Air Jordan 5 Retro “Raging Bull,” as he remembers it), cleaned them off, and resold them on eBay, pocketing $250 in the process.
“I realized there was a market for these shoes to be resold,” he said. He started looking into new releases and became interested in Supreme because it often has a high profit margin on the resale market, due to its limited availability. Supreme, which, like Yeezy, won’t talk numbers, is known to sell its products exclusively through its own stores and website—and intentionally makes the stuff hard to come by. On Thursday mornings, the day the brand releases new merchandise, lines snake around the stores hours before opening.
That strategic scarcity has been a boon to dealers like Brody—and pushed Supreme’s valuation to a billion dollars in 2017. In the past four years Brody estimates he’s made around $55,000 reselling apparel and accessories.
For Axel Petochi, a freshman at the United Nations International School, it began innocently enough, when he and a friend went to wait in line to buy a T-shirt at the streetwear store Kith in New York’s NoHo. They arrived one summer morning at 8 am and received tickets to return later that morning, when they retrieved the tees, only to sell one after being approached on the corner, flipping it for a quick $40 profit. Later, Petochi watched a documentary about people who make a living reselling streetwear. “So I texted my friend,” Petochi recalls, “and was like: ‘Yo, we should do this again.’”
You’ll likely already have noticed that streetwear is currently the dominant force in the apparel market. The NPD Group research firm reported that in 2017, the U.S. athletic footwear industry grew two percent, bringing it to a $19.6 billion business. The same year, management consultants Bain & Co. pinpointed streetwear as a leading cause of growth in the luxury goods market. Matt Powell, senior industry advisor for sports at NPD, estimates that in the fourth quarter of 2018, Yeezy’s retail sales leaped 500 percent. In 2016, Forbes estimated that the secondary commerce system for sneakers was worth $1 billion, and in the two years since then it has no doubt grown, as the movement has only trickled up, invading the collections of high-end designers like Valentino and Louis Vuitton (which collaborated with Supreme for its fall 2017 collection) and as more celebrities—think Justin Bieber, rapper A$AP Rocky, and LeBron James—have embraced the look. An entire cottage industry has developed. The website Grailed specializes in pre-owned, limited-edition hype releases, while StockX bills itself as a “stock market of things” and tracks the fluctuating values of items—recently, a pair of blocky yellow Nike Air Jordan 5 Retro Fab Fives were up for sale for $10,000, while someone else was asking $6,400 for cherry-red Air Yeezy 2 Red October high-tops. Through these sites, young men interested in fashion and commerce mingle, making trades but also connecting.
It’s a brotherhood that’s easy to monetize. Sozio declines to reveal the particulars of his ledger sheet, and he happens to be sporting a Rolex Air-King, which he bought for himself with his profits. Sozio’s business is in some ways a surprisingly old-school, interpersonal affair, especially today, when mobile apps and algorithms dominate the scene. His dealing depends on a worldwide network of contacts he’s cultivated to reserve shoes for him from each release—a size here and there, sent from specialty and big-box retailers around the world, landing in his building’s foyer before he inspects them and sends them off to his customers.
There’s a level of obfuscation that lends the transactions a certain illicit energy. “It didn’t start off this way, but I have strong connections, and now I don’t really have to do anything before a release,” he says. “I source [the shoes] from multiple places … but I can’t tell you where. There are people in stores, or people I’ve met on Instagram. There’s a whole market out there for streetwear.”
On an average Yeezy release, Sozio will acquire about 15 pairs. A best-case scenario is that he can resell a roughly $200 shoe for $2,000. That’s a $27,000 profit. In recent months, some Yeezy styles have been more readily available, making them less desirable. The key to staying in the black, Sozio says, is monitoring the vacillating market.
The Yeezys Sozio deals his clients may be hard to get, but his own personal shoes are on an even higher echelon of rare. He considers the Balenciaga Speed trainers (which go for $770 and were immortalized by rapper Cardi B as “the ones that look like socks” in her track “I Like It”) a go-to as well as his Maison Margiela high-tops. His most prized shoe is a collaboration among musician Pharrell Williams, Chanel, and Adidas, a model that’s incredibly scant—500 pairs were produced. On the website Flight Club, depending on size, they can run you as much as $15,000. Once, outside of Nobu Fifty Seven, Sozio thought two guys on the street were going to jump him for them. The shoes mostly stay in the closet, though, where they have pride of place.
Thanks to his network of well-placed deputies, Sozio is able to run his business while sidestepping the rigmarole of the online purchase process. His clients, who range from men in their 60s to an 8-year-old (not counting the baby-size Yeezys he sold to some mothers)—come to him mostly by social media or word of mouth.
Brody uses the internet to his advantage, leveraging technology to acquire items that would otherwise require him to miss class on a weekly basis. He wields a bot, which he programs to do one thing: Buy Supreme clothing.
“I just go out of class for five minutes, set up the bot, watch it run, and go back to class,” he says matter-of-factly. “I actually asked my ceramics teacher. I said, ‘I have an opportunity for arbitrage, to make some money.’ I didn’t give him the specifics. He said, ‘OK, but you have five minutes.’”
Before the weekly drop, Brody consults online resources like the site Supreme Community, where users vote whether products are “hot or not,” to gauge which items are likely to attract the highest prices. Post-drop, he uses StockX as an intermediary to handle the selling and shipping because it cuts out the annoying variables of selling directly—like returns or complaints of damaged products. “It’s a pretty flawless system,” he says.
In a strange way, these young men are gleaning very adult lessons from this endeavor—about economics, branding, and the whims of consumer behavior. “The crazy thing is this market— Supreme and everything—it changes every day,” says Petochi. “One day it’s falling, and then the next day they announce a collaboration with a big company and it’ll cause some controversy and people are talking about it.”
Sozio has parlayed what he’s learned into his own brand, Litty Sneaks, which has 11,000 followers on Instagram. “Tell the story about the girls in France!” his mother, Amy Kamin, who has been listening in from another room, calls out. It turns out that some young women there were wearing his Litty Sneaks hoodies. They’ve evidently also caught on among a certain Upper East Side set, so much so that Sozio now avoids their hangouts. When his mother dragged him to Pinkberry on Second Avenue one night, she says, “I thought it was Bieber! They were screaming!”
He’s planning to take a course in entrepreneurship at Columbia this summer but could probably teach a few lessons himself. He’s already partnered with the body-care brand Axe and the store Journeys to promote them on his personal Instagram page.
“It’s taught me about competition,” Sozio says. “With sneakers you have limited time, limited quantity. You really have to strategize.” Brody, perhaps, has learned the business world’s most important lesson of all. I ask him if there’s anything in his collection that he’d never part with. He thinks a moment before answering.
“No,” he says. “Everything has a price.”
Correction: An earlier version of this article misstated the relationship between Mitchell Sozio and reality TV star Jonathan Cheban. They are acquaintances and Cheban has given Sozio advice on business matters, however he is not one of Sozio’s clients.