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The Necklace

DOLOR SET AMET

CHAPTER 1

Background

About the author.About the story.

About the author.

Guy de Maupassant1850-1893

Master Storyteller Guy de Maupassant is considered by many to be the great-est French short story writer. He created his characters with remarkable precision, focusing on the exact gesture, feeling, or word that defined each character. As a result, his stories seem to be, in his words, “pieces of human existence torn from reality.”

Reversal of Fortune Although Maupassant was born into an upper-middle-class family in France, the family fortune ran out early. He was forced to work for a time as a government clerk, the posi-tion that the main character’s husband holds in “The Neck-

lace.” Eventually, though, Maupassant turned to writing and managed to achieve some wealth and fame through his hundreds of stories. Sadly, his success was short-lived. After suffering from mental illness, Maupassant died in a Paris asylum at age 42.

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About the story.

Status for Sale This story takes place in Paris in the second half of the 19th century. At the time Maupassant wrote “The Neck-lace,” European societies were divided into upper, middle, and lower classes. Birth usually determined a person’s class. Sometimes a man could buy his way into a higher class by acquiring wealth. A woman could improve her status by marrying into a higher class. One obstacle for women was the tradition of the dowry— money or property that a bride’s family was expected to give her new husband, but that poorer families could not provide.

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SECTION 3

OPTICThe OPTIC Method of Visual Analysis

O = Overview: What is happening in the picture? Summa-rize the “action” of the visual without analyzing its meaning yet.

P = Parts of the picture: Break the picture down into sec-tions. Describe the placement of objects on the canvas. Name everything that you see. Describe color, lighting, and movement in the picture.

T = Title: What does the title tell you about the picture? How much does it add to what you understand or do not un-derstand about the picture?

I = Interrelationships: Analyze the relationships in the pic-ture. How do objects or people or colors relate to each other in the picture? What clues to the message or argument are these relationships giving you? What seems to be the most important “relationship” in the picture?

C = Conclusion: Draw a conclusion to the meaning or mes-sage of the picture based on what you have viewed and dis-cussed as a group. Essentially, what is the argument the art-ist is trying to convey?

All Is Vanity

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The Necklace

By Guy de Maupassant

ESSENTIAL QUESTION

• How does knowing the historical and cultural setting enhance the reader’s understanding of the text?

Think about this idea as you read and be ready to support your response with evidence from the text.

The Necklace She was one of those pretty and charming girls, born, as if by an accident of fate, into a family of clerks. With no dowry, no prospects, no way of any kind of being met, understood, loved, and married by a man both prosperous and famous, she was finally married to a minor clerk in the Ministry of Educa-tion

She dressed plainly because she could not afford fine clothes, but was as unhappy as a woman who has come down in the world; for women have no family rank or social class. With them, beauty, grace, and charm take the place of birth and breeding. Their natural poise, their instinctive good taste, and their mental cleverness are the sole guiding principles which make daughters of the common people the equals of ladies in high society.

She grieved incessantly, feeling that she had been born for all the little niceties and luxuries of living. She grieved over the shabbiness of her apartment, the dinginess of the walls, the worn-out appearance of the chairs, the ugliness of the draperies. All these things, which another woman of her class would not even have noticed, gnawed at her and made her furi-ous. The sight of the little Breton girl who did her humble housework roused in her disconsolate regrets and wild day-dreams. She would dream of silent chambers, draped with Oriental tapestries and lighted by tall bronze floor lamps, and of two handsome butlers in knee breeches, who, drowsy from the heavy warmth cast by the central stove, dozed in large overstuffed armchairs.

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She would dream of great reception halls hung with old silks, of fine furniture filled with priceless curios, and of small, styl-ish, scented sitting rooms just right for the four o’clock chat with intimate friends, with distinguished and sought-after men whose attention every woman envies and longs to attract.

When dining at the round table, covered for the third day with the same cloth, opposite her husband, who would raise the cover of the soup tureen, declaring delightedly, “Ah! A good stew! There’s nothing I like better . . .” she would dream of fashionable dinner parties, of gleaming silverware, of tapes-tries making the walls alive with characters out of history and strange birds in a fairyland forest;she would dream of deli-cious dishes served on wonderful china, of gallant compli-ments whispered and listened to with a sphinxlike smile as one eats the rosy flesh of a trout or nibbles at the wings of a grouse.

She had no evening clothes, no jewels, noth-ing. But those were the things she wanted; she felt that was the kind of life for her. She so much longed to please, be envied, be fasci-nating and sought after.

She had a well-to-do friend, a classmate of convent-school days whom she would no longer go to see, simply because she would feel so distressed on returning home. And she would weep for days on end from vexation, regret, despair, and an-guish.

Then one evening, her husband came home proudly holding out a large envelope.

“Look,” he said, “I’ve got something for you.”

She excitedly tore open the envelope and pulled out a printed card bearing these words:

“The Minister of Education and Mme. Georges Rampon-neau beg M. and Mme. Loisel to do them the honor of at-tending an evening reception at the Ministerial Mansion on Friday, January 18.”

Instead of being delighted, as her husband had hoped, she scornfully tossed the invitation on the table, murmuring, “What good is that to me?”

“But, my dear, I thought you’d be thrilled to death. You never get a chance to go out, and this is a real affair, a wonderful one! I had an awful time getting a card. Everybody wants one; it’s much sought after, and not many clerks have a chance at one. You’ll see all the most important people there.”

She gave him an irritated glance and burst out impatiently, “What do you think I have to go in?”

He hadn’t given that a thought. He stammered, “Why, the dress you wear when we go to the theater. That looks quite nice, I think.”

He stopped talking, dazed and distracted to see his wife burst out weeping. Two large tears slowly rolled from the corners of

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her eyes to the corners of her mouth; he gasped, “Why, what’s the matter? What’s the trouble?”

By sheer will power she overcame her outburst and answered in a calm voice while wiping the tears from her wet cheeks:

“Oh, nothing. Only I don’t have an evening dress and there-fore I can’t go to that affair. Give the card to some friend at the office whose wife can dress better than I can.”

He was stunned. He resumed. “Let’s see, Mathilde. How much would a suitable outfit cost—one you could wear for other affairs too—something very simple?”

She thought it over for several seconds, going over her allow-ance and thinking also of the amount she could ask for with-out bringing an immediate refusal and an exclamation of dis-may from the thrifty clerk.

Finally, she answered hesitatingly, “I’m not sure exactly, but I think with four hundred francs I could manage it.”

He turned a bit pale, for he had set aside just that amount to buy a rifle so that, the following summer, he could join some friends who were getting up a group to shoot larks on the plain near Nanterre.

However, he said, “All right. I’ll give you four hundred francs. But try to get 80 a nice dress.”

As the day of the party approached, Mme. Loisel seemed sad, moody, and ill at ease. Her outfit was ready, however. Her hus-band said to her one evening, “What’s the matter? You’ve been all out of sorts for three days.”

And she answered, “It’s embarrassing not to have a jewel or a gem—nothing to wear on my dress. I’ll look like a pauper: I’d almost rather not go to that party.”

He answered, “Why not wear some flowers? They’re very fash-ionable this season. For ten francs you can get two or three gorgeous roses.”

She wasn’t at all convinced. “No. . . . There’s nothing more hu-miliating than to look poor among a lot of rich women.”

But her husband exclaimed, “My, but you’re silly! Go see your friend Mme. Forestier and ask her to lend you some jewelry. You and she know each other well enough for you to do that.”

She gave a cry of joy, “Why, that’s so! I hadn’t thought of it.”

The next day she paid her friend a visit and told her of her pre-dicament. Mme. Forestier went toward a large closet with mir-rored doors, took out a large jewel box, brought it over, opened it, and said to Mme. Loisel, “Pick something out, my dear.”

At first her eyes noted some bracelets, then a pearl necklace, then a Venetian cross, gold and gems, of marvelous workman-

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ship. She tried on these adornments in front of the mirror, but hesitated, unable to decide which to part with and put back. She kept on asking, “Haven’t you something else?”

“Oh, yes, keep on looking. I don’t know just what you’d like.”

All at once she found, in a black satin box, a superb diamond necklace; and her pulse beat faster with longing. Her hands trembled as she took it up. Clasping it around her throat, out-side her high-necked dress, she stood in ecstasy looking at her reflection.

Then she asked, hesitatingly, pleading, “Could I borrow that, just that and nothing else?”

“Why, of course.”

She threw her arms around her friend, kissed her warmly, and fled with her treasure.

AFTER READING QUESTIONS

For each of the following by finding evidence to support the answer, highlighting the evidence in the text, and making a note of the importance of the text:

1. How does the author identify or describe the setting and time period?

2. Identify two important details about M. Loisel (Mr. Loisel). For each, note why those detail are important to the conflict.

3. Identify two important details about Mme. Loisel (Mrs. Loisel). For each, note why those detail are important to the conflict.

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The Necklace

By Guy de Maupassant

ESSENTIAL QUESTION

• How does knowing the historical and cultural setting enhance the reader’s understanding of the text?

Think about this idea as you read and be ready to support your response with evidence from the text.

The Necklace The day of the party arrived. Mme. Loisel was a sensation. She was the prettiest one there, fashionable, gracious, smiling, and wild with joy. All the men turned to look at her, asked who she was, begged to be introduced. All the Cabinet officials wanted to waltz with her. The minister took notice of her.

She danced madly, wildly, drunk with pleasure, giving no thought to anything in the triumph of her beauty, the pride of her success, in a kind of

120 happy cloud composed of all the adulation, of all the ad-miring glances, of all the awakened longings, of a sense of com-plete victory that is so sweet to a woman’s heart.

She left around four o’clock in the morning. Her husband, since midnight, had been dozing in a small empty sitting room with three other gentlemen whose wives were having too good a time.

He threw over her shoulders the wraps he had brought for go-ing home, modest garments of everyday life whose shabbiness clashed with the stylishness of her evening clothes. She felt this and longed to escape, unseen by the other women who were draped in expensive furs.

Loisel held her back.

“Hold on! You’ll catch cold outside. I’ll call a cab.”

But she wouldn’t listen to him and went rapidly down the stairs. When they were on the street, they didn’t find a car-

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riage; and they set out to hunt for one, hail-ing drivers whom they saw going by at a dis-tance.

They walked toward the Seine, disconsolate and shivering. Finally on the docks they found one of those carriages that one sees in Paris only after nightfall, as if they were ashamed to show their drabness during daylight hours.

It dropped them at their door in the Rue des Martyrs, and they climbed wearily up to their apartment. For her, it was all over. For him, there was the thought that he would have to be at the Ministry at ten o’clock.

Before the mirror, she let the wraps fall from her shoulders to see herself once again in all her glory. Suddenly she gave a cry. The necklace was gone. f Her husband, already half-undressed, said, “What’s the trouble?”

She turned toward him despairingly, “I . . . I . . . I don’t have Mme. Forestier’s necklace.”

“What! You can’t mean it! It’s impossible!”

They hunted everywhere, through the folds of the dress, through the folds of the coat, in the pockets. They found noth-ing.

He asked, “Are you sure you had it when leaving the dance?”

“Yes, I felt it when I was in the hall of the Ministry.”

“But if you had lost it on the street, we’d have heard it drop. It must be in the cab.”

“Yes. Quite likely. Did you get its number?”

“No. Didn’t you notice it either?”

“No.”

They looked at each other aghast. Finally Loisel got dressed again.

“I’ll retrace our steps on foot,” he said, “to see if I can find it.”

And he went out. She remained in her evening clothes, with-out the strength to go to bed, slumped in a chair in the un-heated room, her mind a blank.

Her husband came in about seven o’clock. He had had no luck.

He went to the police station, to the newspapers to post a re-ward, to the cab companies, everywhere the slightest hope drove him.

That evening Loisel returned, pale, his face lined; still he had learned nothing.

“We’ll have to write your friend,” he said, “to tell her you have broken the catch and are having it repaired. That will give us a little time to turn around.”

She wrote to his dictation.

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At the end of a week, they had given up all hope.

And Loisel, looking five years older, declared, “We must take steps to replace that piece of jewelry.”

The next day they took the case to the jeweler whose name they found inside. He consulted his records. “I didn’t sell that necklace, madame,” he said. “I only supplied the case.”

Then they went from one jeweler to another hunting for a simi-lar necklace, going over their recollections, both sick with de-spair and anxiety.

They found, in a shop in Palais Royal, a string of diamonds which seemed exactly like the one they were seeking. It was priced at forty thousand francs. They could get it for thirty-six.

They asked the jeweler to hold it for them for three days. And they reached an agreement that he would take it back for thirty-four thousand if the lost one was found before the end of February.

Loisel had eighteen thousand francs he had inherited from his father. He would borrow the rest.

He went about raising the money, asking a thousand francs from one,four hundred from another, a hundred here, sixty there. He signed notes, made ruinous deals, did business with loan sharks, ran the whole gamut of moneylenders. He compromised the rest of his life, risked his signature without knowing if he’d be able to honor

it, and then, terrified by the outlook for the future, by the blackness of despair about to close around him, by the pros-pect of all the privations of the body and tortures of the spirit, he went to claim the new necklace with the thirty-six thou-sand francs which he placed on the counter of the shopkeeper.

When Mme. Loisel took the necklace back, Mme. Forestier said to her frostily, “You should have brought it back sooner; I might have needed it.”

She didn’t open the case, an action her friend was afraid of. If she had noticed the substitution, what would she have thought? What would she have said? Would she have thought her a thief?

Mme. Loisel experienced the horrible life the needy live. She played her part, however, with sudden heroism. That frightful debt had to be paid. She would pay it. She dismissed her maid; they rented a garret under the eaves.

She learned to do the heavy housework, to perform the hateful duties of cooking. She washed dishes, wearing down her shell-pink nails scouring the grease from pots and pans; she scrubbed dirty linen, shirts, and cleaning rags which she hung on a line to dry; she took the garbage down to the street each morning and brought up water, stopping on each landing to get her breath. And, clad like a peasant woman, basket on arm, guarding sou by sou her scanty allowance, she bargained with the fruit dealers, the grocer, the butcher, and was in-sulted by them.

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Each month notes had to be paid, and others renewed to give more time.

Her husband labored evenings to balance a tradesman’s ac-counts, and at night, often, he copied documents at five sous a page.

And this went on for ten years.

Finally, all was paid back, everything including the exorbitant rates of the loan sharks and accumulated compound interest.

Mme. Loisel appeared an old woman, now. She became heavy, rough, harsh, like one of the poor. Her hair untended, her skirts askew, her hands red, her voice shrill, she even slopped water on her floors and scrubbed them herself. But, some-times, while her husband was at work, she would sit near the window and think of that long-ago evening when, at the dance, she had been so beautiful and admired.

What would have happened if she had not lost that necklace? Who knows? Who can say? How strange and unpredictable life is! How little there is between happiness and misery!

Then one Sunday when she had gone for a walk on the Champs Élysées to relax a bit from the week’s labors, she sud-denly noticed a woman strolling with a child. It was Mme. For-estier, still young-looking; still beautiful, still charming. h

Mme. Loisel felt a rush of emotion. Should she speak to her? Of course. And now that everything was paid off, she would tell her the whole story. Why not?

She went toward her. “Hello, Jeanne.”

The other, not recognizing her, showed aston-ishment at being spoken to so familiarly by this common person. She stammered. “But . . . ma-dame . . .I don’t recognize . . . You must be mis-taken.”

“No, I’m Mathilde Loisel.”

Her friend gave a cry, “Oh, my poor Mathilde, how you’ve changed!”

“Yes, I’ve had a hard time since last seeing you. And plenty of misfortunes— and all on account of you!”

“Of me . . . How do you mean?”

Do you remember that diamond necklace you loaned me to wear to the dance at the Ministry?”

“Yes, but what about it?”

“Well, I lost it.”

“You lost it! But you returned it.”

“I brought you another just like it. And we’ve been paying for it for ten years now. You can imagine that wasn’t easy for us who had nothing. Well, it’s over now, and I am glad of it.”

Mme. Forestier stopped short, “You mean to say you bought a diamond necklace to replace mine?”

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“Yes. You never noticed, then? They were quite alike.”

And she smiled with proud and simple joy.

Mme. Forestier, quite overcome, clasped her by the hands. “Oh, my poor Mathilde. But mine was only paste. Why, at most it was worth only five hundred francs!”



1. Highlight evidence where understanding the setting helps the reader understand the text. Make note of how or why this is true.

2. Highlight one selection where point of view helps the reader understand the text. Make note of what kind of POV this is and how or why it helps the reader.



1. What major conflict does M. Loisel face?

2. What major conflict does Mme Loisel face?

3. What can the reader infer about Mme. Loisel’s values? Identify 2 pieces of evidence for this question and make note of what value is revealed in each.

4. Highlight the last sentence and note

1. why this is ironic

2. why this irony is important to the story

3. between the two main characters, who will this news affect the most? Why?

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Related readings

thematic connections

SECTION 1

You see sneakers...

You See Sneakers, These Guys See Hundreds Of Millions In Resale Profit

By LISA CHOW

Shirod Ince sat at the front of a line of more than 100 people, mostly guys in their early 20s, on a Friday evening last month. For two days, he and his friends had been taking turns waiting outside a Foot Locker in Harlem to buy the new LeBron sneaker. Through the long, restless hours, they had sustained themselves on Popeye’s, McDonald’s and a belief that it would all pay off in the end.

Ince had no plans to wear the new Nikes. No, for the past two years, the 22-year-old basketball coach has been reselling the sneakers he waits for. And he thought he could double, triple, possibly even quadruple his money for this particular pair, get-ting anywhere between $500 and $900 for a sneaker that was selling for $250 retail.

“I’ve been here since Wednesday. I have to get it,” he said. “It’s going to be crazy in the morning.”

Ince thinks of himself as a small-time entrepreneur, but in re-ality he’s part of a complex, rubber-soled mini economy — one with “buyers, sellers, brokers, market-makers and third-party valuation services,” said Josh Luber, who founded Campless, a blog about sneaker data.

Luber, 36, understands this market better than anyone. Since 2012, he has compiled data on more than 13 million eBay auc-tions and posted his analysis on Campless, creating a price guide he calls the Kelley Blue Book of sneakers. The site tracks the prices of more than 1,100 pairs of collectible sneakers — that is, sneakers that sell on the secondary market above their primary market, or retail, price.

The markup can be astonishing. The average eBay price of the LeBron 10 What the MVP sneaker? $2,086. The Nike Air MAG Back to the Future? $5,718. How about the Air Yeezy 2 Red October, designed by Kanye West and released by Nike this year for $250 retail? It sold on eBay for an average price of $2,958, with almost two dozen people paying at least $8,000, Luber said.1

Luber — a fanatical sneaker collector himself, with 178 pairs on display in his home — says eBay’s sneaker business totaled $338 million in the last year, up 31 percent from the year be-fore. Sneakers, he says, have become “boxes of cash” for many

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people. As soon as Foot Lockers across the country open each Saturday, thousands of pairs are on eBay.

None of this happens, of course, without the complicity of Nike, which is on track to hit $30 billion in sales this year. By inventing the concept of a limited sneaker, the company helped spawn a secondary market that puts money in the pock-ets of Ince and other investors.

It’s puzzling behavior for a money-making behemoth. So lately Luber has been fixated on a complicated question: Is Nike leaving money on the table — and giving up profits to the secondary market — by limiting the supply of certain lines of its sneakers? And if so, why?

<-------------------->

When I visited Luber at his Philadelphia apartment in July, he came to the front door unshaven, wearing sweatpants and a Nike shirt — and no shoes. He prefers to go barefoot around the house.

And yet shoes are his obsession. They’re displayed on custom-built shelves in his basement, which also happens to be the guest bedroom, his daughter’s playroom and his wife’s office. “Basically anywhere we’ve lived there’s been a shoe wall,” said his wife, Patricia Luber.2 In Atlanta, the sneakers lined glass shelves and were lit up by rope lighting. And they found space in their small New York City apartment for a “mini shoe wall.” But the current display “is the grandest showcasing to date,” she said.

Josh — who actually wears his shoes and has never resold a pair — also keeps an assortment of brand-new sneakers near his desk at home, and slips them on as he works. (They mi-grate to the shoe wall only after he’s worn them outdoors for the first time.)

None of Patricia’s shoes (Nike or otherwise) has ever been al-lowed on the wall — there really isn’t room, Josh says — but he’s made an exception for their 2-year-old daughter’s.

“I bought my daughter a couple of pairs of Jordans till my wife found out how much they cost,” said Luber, who spent be-tween $60 and $75 on each pair.

Luber grew up in the ‘80s and ‘90s, dreaming of basketball greatness. He played high school ball and plastered the walls of his bedroom with posters and Sports Illustrated covers of his favorite players. It was the Michael Jordan era, and all Lu-ber wanted to do was wear Air Jordans.

But the sneakers were expensive — $100 at the time — so it wasn’t until after he graduated from college and was working that he bought his first pair, the Air Jordan 11 Concord.

He pulled them off his shoe wall to show me. The sneaker is mostly white, with black patent leather wrapping around the bottom half. Luber’s pair is in surprisingly good shape.

“When I first bought these sneakers in 2000, I literally walked into Foot Locker a couple of weeks after they were released and bought them, because back then, sneakers used to sit on

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shelves for a while. … We didn’t have the resale market,” he said. “The last time they were released in 2011, there were ri-ots.”

Capitalizing on the power of the Jordan brand, Nike has been re-releasing the classic Air Jor-dans (models 1 through 14) over and over again. The Air Jor-dan 11, for example, has been released some 40 times over nearly 20 years — in different colors. Take all those classic models and colors, release them dozens of times in limited quantities, and you’ve got lines outside Foot Locker and other Nike retailers every Saturday morning. (The original 1995 pair, if unworn, sells on eBay for an average price of $479. Lu-ber’s 2000 version sells for $351.)

“Michael Jordan is, without a doubt, the father of the sneaker-head culture, and still even today,” Luber said.

The lord of the Concord is 51 now and hasn’t played profes-sionally in more than a decade, but his brand continues to be a huge part of Nike’s business. Jordan footwear makes up nearly a quarter of the company’s shoe revenue. It makes up an even bigger part of the secondary market. Luber estimates that about half of all money spent on sneakers on eBay is for the Jordan brand.

Luber’s obsession is what compels him to stay up until 3 a.m. most nights — outside his full-time job as a strategy consult-ant at IBM — collecting data on sneakers. Using eBay’s public

API, he can crunch the sales numbers in spreadsheets and learn all sorts of things about the secondary sneaker market. With sneakerheads on Instagram stoking consumer desire, Lu-ber says it’s the perfect moment for him. “So the timing worked out really well,” he said. “My obsession with sneakers and obsession with data were growing at the same time.”

<-------------------->

Luber tried to think of everything when he created his price guide. To get a sneaker’s true value, you have to make sure you’re looking only at eBay auctions that end in a sale — about half don’t — and auctions of authentic, name-brand sneakers. Lots of fakes are sold on eBay — accounting for about 10 per-cent of sales, Luber estimates — and their prices would cor-rupt the price guide.

Luber has created some rules for eliminating fakes from his calculations: First, he sets a floor and a ceiling on the price of a sneaker3; second, he throws out any outliers, i.e. prices that are more than two standard deviations from the mean; and third, he excludes auctions that have words like “replica,” “fake,” “AAA” and “variant” in the title. (The market has grown so big that some sellers specialize in good-quality fakes.4)

Another challenge is figuring out which sneaker — which model, size, color and release year — is actually for sale in a given auction. “An eBay auction has a lot of noise in it,” Luber

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said. Sellers throw in keywords just to get their auction to pop up in search results. Luber has to have faith in his system, be-cause with 13 million auctions and counting, there’s no way he can check every one.

Using data from eBay and other sources, Luber also tries to an-swer all sorts of questions about the secondary market: Do sneakers behave more like stocks or drugs? What’s the most expensive sneaker size? Who’s the typical sneakerhead?

A lot of resellers take orders from customers before shoes are even released. Luber has noticed that prices tend to be high be-

fore the release date, when the hype is loudest. They generally fall when the shoe comes out, then rise steadily after that.

“There’s only so much to talk about with sneakers — when it’s coming out, how much does it cost, how do I get a pair,” Luber said. “This expands that. It adds a layer of content to the com-munity that didn’t exist before.”

Luber has a dozen people who help him on Campless — his younger brother, a handful of data nerds and entrepreneur types like him, and several sneakerheads he has met through the site. All volunteer their time. Often, Luber says, they have “philosophical debates,” such as whether to include shipping in the price people pay for shoes. Say the sneaker sells for $100 but the seller is charging $70 for shipping. Is the sneaker’s true value $100 or $170? In the end, Luber’s team decided to include shipping.

<-------------------->

You hear of lucrative secondary markets in stocks, bonds and options, but rarely do you hear of them in material things.5 That’s because companies normally price their goods and sup-ply the market to meet consumer demand, as a way of maxi-mizing profit.

The existence of a secondary market in sneakers raises ques-tions for economists and people like Luber: Is it rational to sell a sneaker for $250 and let the buyer resell it for $8,000, earning a 3,000 percent return on his or her money? Could Nike capture any of that money?

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What Sneakerheads Pay for Air Jordan Retros

“This is kind of the holy grail of sneakerhead questions,” Lu-ber said. It’s the central question of all his research — it comes up, in some form, every time he analyzes any aspect of the sec-ondary market. “It’s a really complicated question,” he said.

To start answering it, you first have to know this: How much money, exactly, is Nike letting the resellers walk away with?

Luber has a good handle on how much eBay resellers in par-ticular are earning over and above sneakers’ retail price: In 2013, they made about $60 million in combined profits.6 But to arrive at a figure representing profits of the entire secon-dary market in sneakers, Luber has to make a big assumption about the size of eBay’s role. People also buy and sell sneakers at consignment shops such as Flight Club, blogs such as Sole Collector, forums such as NikeTalk, and of course, on Craigslist, Instagram, Twitter, Facebook, and in face-to-face deals at sneaker shows or on the street.

Based on interviews with people knowledgeable about the in-dustry, and on sales data from some of these outlets, Luber be-lieves eBay’s collectible sneaker market represents a quarter of the secondary market — an estimate he calls conservative.7 This suggests that resellers made $240 million last year, all but $10 million of it on Nike products. That $230 million is equivalent to 8.5 percent of Nike’s earnings in fiscal 2014. Knowing how difficult it is for a large company like Nike to add even 1 percentage point to its bottom line, Luber said, this isn’t a number to ignore.

To know whether Nike could capture any of the millions of dol-lars consumers spend in the secondary market, it helps to un-derstand why people want these sneakers in the first place.

While the Jordan brand continues to dominate, Nike makes sure it cultivates deals with other fan favorites: LeBron James, Kobe Bryant and Kevin Durant all have their own sneaker lines. Last year, Nike spent $3 billion on what it calls “demand creation” — marketing — which is more than the total revenue of Under Armour, a competitor that started offering basket-ball footwear four years ago.

By restricting the supply of its popular brands, Luber says, Nike is tapping into another consumer desire: to have some-thing no one else has.

On that Friday night at the Harlem Foot Locker, I met several sneakerheads who confirmed this sentiment. But they also went much deeper into the psychology of consumers like them.

Frank Taylor, who is 23 and lives in the Bronx, had already been waiting several hours when I caught up with him. He had come with his friends and had a spot somewhere in the front third of the line. He wore a white hoodie and, standing well over six feet, he towered over the crowd. He said he owns about 150 pairs of sneakers, having collected them over a dozen years.

23

These days, a lot of people use bots to buy shoes online as soon as they’re released. Others exploit an inside connection; Foot Locker employees are kings in the secondary market-place. Taylor is old school and only buys retail. Sneakerheads take pride in having bought new shoes from the store, because camping out in long lines shows commitment.

“You get respect from the sneaker community,” Taylor said. “People are like, wow, how’d you get those?”

After I did the math on Tay-lor’s collection — 150 sneakers at about $250 a pair — I asked him whether it was possible he’d spent nearly $40,000 on shoes. “Easy, easy,” he said.

“Some people spend that money on weed,” he said. “I decide to spend mine on sneakers.”

Farther back in the line, I met 23-year-old Quay Johnson, who told me he has more than 200 pairs — half of which he hasn’t worn — and that he’s been collecting sneakers since he was 8 years old.

“My grandmother always says when I die, she’s going to bury me, going to put my sneakers in the ground with me,” he said.

Like most of the people in this line, Johnson, who works at a drugstore and in construction, wasn’t interested in reselling his pair.

“I just want it for me,” he said.

So owning a scarce resource taps into a basic desire to hoard things of value. It gets you respect. But it does something else, too. Nike’s strategy of limiting supply creates a gap — some-time a significant one — between what a shoe costs (at retail) and what it’s worth.

That differential allows people to buy something on the cheap but feel like they’re wearing a luxury item.

“So even if you paid $100, you’ve got $800 on your feet. It’s like having Gucci,” Taylor said.

As he explained this, he realized that wearing a limited-edition LeBron sneaker may in fact be better. The moment you walk out the door wearing a pair of Gucci shoes, it’s worth less. “You can’t sell it for what you paid,” Taylor said. But with certain Nike sneakers, you can buy them, wear them all day, and still sell them for a profit.

That’s because within hours (sometimes minutes) of Nike’s re-lease of a limited-edition sneaker, the shoe is gone — totally sold out at retail outlets. It lives only in the secondary market. And so, Taylor said, people who want the shoe have no choice but to buy what’s already been obtained by someone else.

24

Why isn’t Taylor selling his shoes, if he could make such huge premiums on them? “If you talk down a car and you get it for a good deal, you’re not going to sell it. You’re going to drive it,” he said.

Sneakers have become like art for a lot of these men. Some want to buy low and sell high, to make a profit, but most just want to hold and admire — and sometimes show off.

<-------------------->

Nike may be leaving money on the table, but the company cer-tainly isn’t suffering. In fiscal 2014, it did $27.8 billion in sales — an increase of about 10 per-cent from the previous year, not easy for a big company. West-ern Europe accounts for a lot of that growth, but North Amer-ica, Nike’s largest market, also saw 10 percent growth.

“How much bigger can Nike get in the United States?” asked Sam Poser, an equity analyst at the brokerage firm Sterne, Agee & Leach. “They can get big-ger.”

When you ask Wall Street analysts why Nike allows resellers to pocket the profits from shoes, many say it’s great market-ing: It fuels excitement about the brand, and it rewards the company’s most loyal customers. “They’re exceptionally good

at keeping people hungry,” Poser, who has been following Nike for more than a decade, said. “They understand the cool factor, and they know how to stay cool. And if they don’t stay cool they know this business dries up, because this is fashion.”

Cool — especially to sneakerheads — often refers to something that’s hard to get. Nike has also made basketball shoes cool through its pricing. Air Jordans and LeBrons typically retail between $150 and $275.

“Because it’s expensive, it makes [Nike] a lot of money. And because it sells out in a heartbeat, it makes everybody a lot of money,” said Poser, who used to work as a footwear buyer for Bloomingdale’s, Champs Sports and The Sports Authority. “If you talk to the retailers, they always want more [pairs]. They’re never satisfied but they also understand that if they got too much, it could kill the golden goose.”

Another benefit to keeping supply tight is that Nike doesn’t have to discount sneakers to move inventory, said Paul Swi-nand, an analyst with Morningstar. Doing so could cheapen the brand’s perceived value.

And yet I wondered whether there was such a thing as keeping supply too tight, and giving up too much money to resellers. The retail market operates almost inversely to the secondary market. Think about it this way: If Nike produced only a sin-gle pair of sneakers every year — call it the Air Only — the re-tail price would be, say, $300. But whoever bought the pair for $300 could probably resell it for some astronomical amount. That was pretty much the case with the Air Yeezy 2

25

Red October, the Kanye West sneakers, which had an average resale markup of 1,083 percent.

When I asked whether there’s a point at which Nike gives up too much profit to resellers, Poser paused and said, “I don’t know the answer to that question.”

He saw only the benefits of a robust secondary market. Re-sellers are essentially doing PR for Nike; they’re curators. And Nike, he said, under-stands that to sell stuff it needs strong curators — whether that’s Foot Locker, Michael Jordan or some of the guys waiting in line in Harlem.

<-------------------->

Of course, most people in the Saturday morning lines at Foot Locker just want to wear the shoes. Luber says that under-scores one of the challenges Nike would face if it tried to stifle the secondary market by raising prices or increasing supply.

Luber says only 1 percent of Air Jordans sold at retail end up on eBay, based on his analysis of retail and eBay sales data. Again, assuming eBay makes up a quarter of the secondary market, then presumably 4 percent of Air Jordans sold at re-tail end up on the secondary market. That suggests 96 percent of consumers buying Air Jordans are paying the average retail

price of $170, instead of the average secondary-market price, which Luber says is $265.

So, how many of those customers would Nike lose if it raised the retail price or increased supply?

The answer depends on several things. First, how much do the retail customers care about price? The more price-sensitive they are, the more Nike risks losing them if it charges more. Second, how much do these customers care about that gap be-tween what the sneakers cost and what they’re worth? The more they care, the better the chance Nike would scare them away with higher prices or more supply.

And the third but perhaps most important issue: How critical are these intensely loyal retail customers to Nike’s business? Could Nike stand to lose some of them, but potentially gain a lot of other customers — perhaps a much bigger group of people — who aren’t willing to wait in line?

Nike presumably knows these answers, but a spokesman said by email that the company didn’t want to comment for this ar-ticle.

26

In Luber’s mind, it’s not worth it for Nike to lose the serious sneakerheads in favor of other customers who will buy sneak-ers only once or twice a year. Nike captures that second group anyway — with its ubiquitous Nike Air Monarchs, which retail for as little as $50.

“They would rather err on the side of leaving money on the ta-ble than risk disrupting the secondary market and all the mar-keting, brand cachet, PR and hype that comes with having a really vibrant secondary market,” Luber said.

And yet, there are some recent signs that Nike executives are curious about the secondary market. In June, the company announced that eBay’s CEO, John Donahoe, had joined Nike’s board. Nike has also been tinkering with its level of production and pricing, with second rounds of sales of limited-release sneakers (what it calls restocking), as well as more frequent re-releases of Air Jordans. Also, starting next year, Nike is expected to raise the price of some of its Air Jor-dans 10 percent to 15 percent, because it says it’s using higher-quality material to make the sneakers more like their original versions. This increase far exceeds typical price in-creases for Air Jordans, which have tracked closely with infla-tion.

<-------------------->

When the Foot Locker in Harlem opened a little after 8 a.m. that Saturday, clerks lifted a metal gate just high enough that people had to crouch down to get inside. At one point, guys were yelling and pushing each other against the gate, and within minutes eight police cars showed up to calm everybody down.

After days of waiting, Shirod Ince needed only a couple of min-utes to buy his sneakers. He walked out with the LeBron 11 What the LeBron, in a size 12. Within an hour of the store opening, all shoes under size 10 were sold out.

Some of the speculators worried that the lines for this release were shorter than usual, suggesting the demand for this shoe might not be as strong as expected. Josh Luber saw this com-ing. He had been watching eBay’s average price for pre-orders of the sneaker, and it had fallen rapidly. In April, people were pre-ordering the LeBron shoe for $1,006. By early September, the price had dropped to $430.

It was expected to be an extremely limited sneaker, but as it became clear that more retailers were carrying it — two weeks before any release, stores start to advertise that they’ll be sell-ing a sneaker — the market started to wise up.

I called Ince later to see how things had gone for him. He told me he’d sold the shoe to a South Carolina buyer who had seen his post on Instagram. His sale price was $500 — almost dou-

27

ble the retail price, but at the bottom of the range he had ex-pected.

“My priority was to get a buyer. I wasn’t trying to be greedy or anything,” he said.

Given how much time he had spent in line, however, I won-dered how he felt about earning the equivalent of minimum wage.

No problem, he said. He’s hoping to start his own consign-ment shop and sees the long waits as practice toward deliver-ing on his promises.

“For me, I think it’s worth it.”

CORRECTION (October 17, 10:30 a.m.): A label on an earlier version of a chart in this article misstated the percentage of sneakerheads who sell their sneakers for strategic purposes. It is 25 percent, not 33 percent.

<-------------------->

Footnotes

1.These prices are based on auctions that ended in a sale in the last 12 months. Luber looks at the final prices that sellers and buyers agree on, not list prices.

2.Patricia and Josh met 10 years ago in law school, and she knew about his sneaker fetish from the beginning. She vividly

remembers him wearing pink Air Jordans — something not every guy can pull off. “But he was able to,” she said.

3.Of the three rules, this one is the least objective in that it re-quires judgment on Luber’s part.

4.Luber has written a four-part blog post on the subject.

5.Cars have a big secondary market, but it’s not “lucrative” in the way I’m defining it. I’m focused on secondary markets in which there’s a reasonable chance the good is sold for more than its primary market price. Sporting event or concert tick-ets come closest to a lucrative secondary market, and compa-nies like StubHub, which itself is owned by eBay, have capital-ized on this.

6.That number includes profits made on brands other than Nike, but Luber estimates that Nike represents the vast major-ity — about 96 percent. We’re defining profit as the price the reseller got minus the retail price.

7.Of the three resellers I interviewed in Harlem, one said he used eBay to find buyers. Another used Instagram, and the third used old-fashioned word-of-mouth marketing. There’s also a disincentive for resellers to use eBay because the auc-tion site charges 10 percent of the sales price and other fees. I also checked with a couple of equity analysts who cover Nike, and they thought Luber’s estimate seemed reasonable.

Lisa Chow was previously a features editor for FiveThirt-yEight. @lisaechow

28

Allison McCann is a visual journalist for FiveThirtyEight. @at-mccann

29

Adulation

excessive praise or flattery

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