Nike is cracking down on the people who personalize its sneakers. But does he shoot himself in the foot?
Last year, Kino Hernandez and a close friend of his went into business personalizing sneakers and selling them online. A few weeks after the start of the operation, his friend was sentenced but Hernandez decided to go ahead. “It had been about three months and that’s when I started getting orders – and I’m not talking about local orders,” said the resident of Salem County, New Jersey. “I received my orders from California and Las Vegas. ”
Adding colors and patterns to the shoes over the past few months has earned Hernandez around $ 10,000 in income, he estimates. For Hernandez, the shoe customization business allows him to generate income while working part-time while allowing him to exercise his artistic talents – an ideal work-life balance, he said. declared. But a Nike lawsuit threatens that livelihood, not just for Hernandez, but for countless other shoe customizers.
The lawsuit, filed last month in California, accuses Drip Creationz – one of the world’s largest shoe customization companies – of deconstructing Nike shoes, adding new materials to them and reselling them for a much higher price. at normal retail price. It violates trademark and copyright laws, Nike attorneys said.
“Our goal is to help ensure that consumers can purchase our products which are both genuine and authorized by us and that there is no confusion for consumers,” Nike said in an email. at CBS MoneyWatch. “None of the items sold by Drip Creationz are authorized Nike Inc. products.”
Nike’s complaint suggests the company is considering going after anyone who personalizes their shoes, including individual operations like Hernandez’s, according to a legal analyst.
Should Nike care?
No one knows exactly when people first started modifying Nike shoes, but those involved in the world of customization say the practice dates back decades. Of course, the work is not exclusive to Nike shoes. Customizers work on Adidas, Vans and any other favorite shoe brand of their customers.
According to market research firm NPD Group, one of the best-selling sneakers in the United States is the Nike Air Force 1, the very shoe that many customizers use as blank canvas.
“None of this is done out of spite,” said Aron Solomon, a Montreal lawyer and self-proclaimed sneakerhead, referring to the trend towards customization of shoes. “Rather, it’s just about encouraging people to buy more from Nike.”
Hernandez, one of the many customizers who pay retail for Nike shoes to be personalized, said the sports gear giant’s costume was not his concern. “I’m not really scared of that. If they win, then I’ll just find another shoe to work on.”
A 21st century cottage industry
Most customizers are either seasoned artists, fashion fanatics, savvy entrepreneurs, or all three, Solomon said. “The majority of people are just one or two artists working in their garage or basement and do one or two at a time just as a hobby or hobby,” he told CBS MoneyWatch .
Seasoned customizers are masters of the art of wiping an acrylic solution on a new shoe to remove the protective coating, then dipping their brush in specialized leather paint to recolor different parts of the shoe. For accomplished artists like Hernandez, a finished pair typically takes around 72 hours, but more complex designs can take significantly longer.
“The longest I’ve worked on a shoe was a month,” Hernandez said, adding, “I’m a one-man factory right now.”
Some customers ask for a simple re-coloring of a few spots on the shoe, which will cost them around $ 100. But more elaborate requests can cost $ 10,000 or more.
Social media has been key in generating interest in shoe customization, with online communities suitable for all levels of interest and experience. Customizers post photos of their latest creations, often sparking heated debate from fans, while other artists compare their notes on the technique.
New customizers are relying on platforms like Facebook, Instagram, and Twitter for where to buy the right paint, when to layer colors, how to perfect their stencil, and other handy tips. Customizers even get their job postings on social media via direct messages, Hernandez said.
“Materially modified” footwear
Customizers make money either by designing and selling a shoe online or by working with clients looking for a specific design. For Nike, this is a problem.
When someone personalizes a shoe, it is “materially altered in a way that neither Nike nor our partners have approved or authorized,” the company said. This may involve the use of trademarks and trademarks of other companies with which Nike has never agreed to collaborate.
“The more unauthorized customizations are made and sold, the more difficult it becomes for consumers to identify authorized collaborations and genuine products,” according to Nike. “Uncontrolled aftermarket personalization undermines our brand, as we lose control of what the brand means and our message. “
For its part, Nike would not say if it plans to legally challenge other customizers once the Drip Creationz case is resolved. But the company has filed a second lawsuit alleging trademark infringement against former employee-turned-customizer Jeffrey Waskowiak and his company KickRich.
In May, Nike also– modified versions of his bubble shoes that the Brooklyn, New York art collective produced in tandem with rapper Lil Nas X whom the group describes as having “human blood in their soles.”
“Giant brand error”
For Nike and customizers, what’s at stake is a massive athletic footwear market share, which analysts predict to reach $ 66 billion by 2027. Athletic footwear sales have increased by over 35% in the first six months of 2021 compared to last year’s figures. , according to the NPD group.
At its core, the Nike lawsuit is about how far consumers can go under the law to modify and resell a commercial product, Solomon said. Does the line end with painting faces or logos on a shoe, for example, or does it extend to replacing the sole, tongue, or leather? Either way, he thinks “Nike is making a giant branding mistake” in pursuing the case.
In the Drip Creationz lawsuit, Solomon said Nike may have a hard time proving the company has suffered monetary losses. And a customizer, Rasheen Dixon of Schenectady, New York, believes Nike could hurt itself even more by winning in court.
“Nike is going to lose a lot of US-based customers if they crack down because no one wants to wear a Nike Air Force 1 that everyone can have,” Dixon said.
Dixon said he started customizing shoes about three months ago and already had several clients. Orders are also starting to rise as students prepare to return to school, he told CBS MoneyWatch.
“Even if they win, we’ll find other brands to customize,” he said of the Nike suit. “There will always be a way for us to do what we love and make it work for us.”