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What DJ Khaled Taught Stadium Goods About Seizing the Streetwear Moment

As it turns out, Stadium Goods’ “if you build it, they will come” mentality didn’t initially pan out when the sneaker resale marketplace opened its $40,000-a-month SoHo retail space years ago.

Those first weeks in the wake of the store opening were “a very painful and soul-searching time in our business,” CEO and co-founder John McPheters said at the WWD Digital Forum in New York City Thursday. With just $100 in the cash register on some days and “our backs against the wall,” the executive said, the company needed to figure out its strengths—and quickly.

That led McPheters to home in on what Stadium Goods as a store had to offer, beyond basic inventory. McPheter’s team had designed a “pristine” retail space with an eye-catching sneaker wall, the kind of place that looks right at home in an Instagram feed. Plus, the company already had an established photography practice to capture sneakers from every angle.

The answer for Stadium Goods was to retrofit the store and transform it into a content studio that would, among other things, broadcast live and bring viewers around the globe into the beating heart of sneakerhead culture and “who we are,” McPheters said. The company also realized it could seize the streetwear moment and media interest by inviting in the Complexes and High Snobieties and Hypebeasts of the world that wanted to shoot their own content in a space authentic to the urban lifestyle.

That pivotal moment helped the footwear temple to reach $100 million in gross merchandise value in its second year of business, McPheters added.

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The Fordham MBA grad admitted that speaking authentically to customers—from the grandmother shopping for her grandson to the plugged-in teen—is a challenge when Stadium Goods stocks $100 footwear alongside rarities like the $47,000 pair, housed in the “trophy case,” that was recently sold. McPheters points to musician and mogul DJ Khaled as setting an important example that has guided the business’s evolution.

Headlining a store event that was predictably mobbed by fans wrapped around the block, DJ Khaled “talked to every single person,” spent hours on end snapping photos with fans, and engaged with them on their own social channels, McPheters explained.

Simply put, DJ Khaled is “able to bridge the gap between the elite luxury brand persona that he presents, but at the same time he’s super accessible to his fans,” he noted. “The idea of consumer inclusion is kind of a new one. There was a time where you’d walk into a sneaker boutique and if it didn’t fit the bill, you might get laughed out the door or you wouldn’t get help. It never felt comfortable—even if you were a consumer who was ‘supposed’ to be there.”

What Khaled was able to do by bringing everyone in, McPheters explained, was impart an important lesson on how to interact with these consumers, no matter who they are, where they’re from or what they’re looking for. “You have to be able to have those different conversation touch points at all levels with all types of people,” he continued. “We’ve done a lot to build out a consumer-inclusive content experience and that’s what we took away from the Khaled experience.”

That content beast has only grown as Stadium Goods extends into markets such as Germany and China, where the consumer expects and responds to a gamified shopping experience such that even a $1 coupon will “dramatically enhance sell-through” on a $400 product, McPheters said by way of example.

Though China is a small piece of the company for now, it’s an important and growing one. Last year’s 11.11 Singles’ Day shopping festival yielded $3 million in topline sales, which Stadium Goods expects to quadruple this year. Selling on Tmall is not without its challenges, McPheters stated frankly. Each year the window of time that Tmall requires to lock in inventory counts and pricing for the shopping event grows longer, which means extensive planning with sellers to get the numbers right. It’s important to settle on the prices beforehand “so we know we’re not going to lose our shirt with the discounts,” McPheters said, adding that Stadium Goods hosts live broadcasts designed specifically for 11.11.

Given that sneaker culture has become an experiential tour de force, in-the-moment videos will remain an important part of the strategy for Stadium Goods, whose $5,000-per-square-foot revenue puts it on par with Apple stores and Tiffany’s.

“When we get a product ahead of release, there’s a tremendous opportunity to do an unboxing and live broadcasting,” McPheters said, noting that those events “really resonate,” especially when it’s an exclusive. “People don’t have anywhere else they can see that stuff.”

Beyond new geographical markets, Stadium Goods has plans to expand its audiences from the basketball and hip-hop core into areas like gaming, with a Twitch partnership teed up. “That differentiation of the different niche verticals is a huge part of how we’re going to continue down this content path,” McPheters said.

Stadium Goods raised its profile—and eyebrows across the industry—when LVMH Luxury Ventures made an investment of an undisclosed amount earlier this year amid a growing crossover between traditional luxury and the streetwear world. The two have their synergies, given the sneakerhead’s need for newness and hard-to-find, brag-worthy product.

“It’s a release driven culture,” McPheters said. “People are always looking for that next shoe.”