Stadium Goods, a New York-based player in the $6 billion global collectible sneakers market, has raised $4.6 million in new equity funding led by Forerunner Ventures and The Chernin Group.
The fundraising comes just five months after Stadium Goods opened a flagship store on Tmall Global, Alibaba’s cross-border e-commerce platform. In an interview following the announcement, Stadium Goods co-founder John McPheters said that entering the Chinese market via Tmall Global has helped drive growth for the company since launching in 2015.
“Obviously the Alibaba thing was big for us,” McPheters said, without disclosing exact figures. “We’ve seen a big jump in sales from it.”
Stadium Goods operates a bricks-and-mortar store in New York as well as an online marketplace to resell its limited-edition kicks. Collectors looking to sell their sneakers bring them in for authentication, and then the company acts as a middleman in the search for a prospective buyer. Stadium Goods collects a commission once the shoes are sold. It may sound niche, but the sneaker resale market in the U.S. alone is worth $1.2 billion.
While that demands a focus on its home turf, McPheters said the move to Tmall Global no doubt caught the attention of investors. When such a young company launches a flagship store, he said, “People that know what it is really perk their ears up and know we’re looking at things differently.” Many brands that sell through Tmall Global are household names such as Macy’s and Procter & Gamble.
Part of the $4.6 million is earmarked for international expansion, including China. McPheters said he will focus on brand building and customer acquisition in an attempt to generate more business on Tmall Global, then consider adding headcount. Stadium Goods currently has two full-time and one part-time staff in New York dedicated to online China sales.
“We’re in a position now where we can add to it as it grows,” he said.
McPheters pointed to the 11.11 Global Shopping Festival in November as a turning point for Stadium Goods’ China business. Faced with the resale market’s notoriously low margins, the company used a combination of coupons and gifts to draw consumers instead of relying the large discounts typically associated with the world’s largest online sale. It worked.
While Stadium Goods did see a spike in transactions that day, McPheters said, “The baseline has just continued to go up.”
The help offered by Alibaba has proved beneficial as well. McPheters noted that despite its size Alibaba still moves as quickly as a startup. That focus on outcome, while avoiding a bureaucracy that can slow down operations, was one reason why the Stadium Goods flagship store has done so well, he said.
Earlier this week, Alibaba Group Executive Chairman Jack Ma during a meeting with President-elect Donald Trump promised to create 1 million U.S. jobs by helping small-and medium-sized enterprises sell to China through Alibaba’s online marketplaces.
“As they look to bring on small businesses, that’ll be a huge asset to drive their success,” McPheters said.