Nike's priciest shoe yet: The $315 LeBron

For your money, you'll get motion sensors that measure how high you jump. The new model is part of the sneaker giant's plan to hike prices as consumer spending recovers.

By Jonathan Berr Aug 21, 2012 11:41AM
Image: LeBron James' shoes in the men's basketball gold medal game between the US and Spain on Day 16 of the London 2012 Olympic Games (© Christian Petersen/Getty Images)Nike (NKE) plans to raise prices by as much as 10% and to debut its priciest sneaker ever in another sign that businesses are confident the U.S. economic recovery will gain momentum ahead of the presidential election.

The Wall Street Journal
reported Tuesday that Nike's price increases are designed to reverse six straight quarterly declines in gross margins as raw materials, shipping and labor costs rise. Other sneaker companies are raising prices as well. Nike's $315 LeBron James shoe is set to debut in the fall and will feature motion sensors that can measure how high players jump. For that price, the sneakers should also guarantee that people who wear them can make a three-point shot. 

Consumers are expected to flock to Nike's stores to snap up the LeBron X Nike Plus -- and that worries the Beaverton, Ore., company. It has made retailers such as Foot Locker (FL) and Dick's Sporting Goods (DKS) forgo releasing "hot" sneakers at midnight and will no longer permit them to pre-sell or take reservations for new shoes.

Shares of Nike have barely budged this year. Wall Street had been down on the stock since the company reported disappointing quarterly results, along with many other consumer products companies, amid worries about slowing growth. Activist investor William Ackman has taken a position in Procter & Gamble (PG), the world's largest consumer products company, for that reason. That view, however, may be changing.

Consumer confidence, which had been faltering, rose unexpectedly in August, even though the unemployment rate also edged up and wages remained stagnant. Will that mean more consumers will buy expensive Nikes and other name-brand consumer goods? Perhaps.

Wall Street analysts have an average 52-week price target on Nike of $105.40, about 10% above where it trades now. Sales in the current quarter are forecast to rise 5.5% to $6.4 billion. Under Armor (UA), a maker of trendy athletic apparel, is expected to do much better, posting $575.12 million in revenue in its current quarter, a 23.5% gain.

But there are limits. As Bloomberg News notes that births fell to an 11-year low in 2011 amid worries about the economy. Wall Street expects flat revenue growth at P&G for the next two quarters.

Nonetheless, resurgent consumer spending would be good news for President Barack Obama's re-election efforts. The economy is the main issue in the campaign. GOP challenger Mitt Romney will have a tough time arguing that voters are worse off than they were four years ago if many of them are clad in trendy exercise clothes and high-tech sneakers.

Jonathan Berr does not own shares of the listed companies. Follow him on Twitter@jdberr.
Tags: DKSFLPGUA
611Comments
Aug 21, 2012 3:17PM
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I love Lebron, but I just don't think that he should advertise a shoe for this amount being that the economy is not at its best.......To me it seems a little selfish of him, this is a shoe for the rich......not the finacially challenge and we are the ones that are his fans the most.............
Aug 21, 2012 3:16PM
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That is a waste of money, and they cost $45 to make......waste of $$$$
Aug 21, 2012 3:14PM
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yea ill run right out and buy 3 pair

                  NOOOOOOOOOOOTTTTTTTTTTTTTTTTT

Aug 21, 2012 3:12PM
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Lebron sucks, Jordan Rules. No reason shoes should cost 315 thats why people get killed is because companies but a ridiculous price tag on stupid $hit. Will the real all time greatest please stand up!
Aug 21, 2012 3:12PM
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At $315 the only ones wearing them are going to be the drug dealers and the thugs robbing the hard working people who can't afford to buy these sneakers!!!!!

Aug 21, 2012 3:11PM
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These shoes are fashon, not 'sneakers'. No one complains about or (racistly) insults the buyers of 300+ dollar Italian loafers, or cowboy boots.

 

Now, I'd never buy them (or any Nikes). They're over priced, out of my budget range, and totally not my style. But, the point is they are fashon statements for the people who do like them. Would you play a game with these on? Letting them get all scuffed and grass stained? Again, NOT sneakers.

 

About the economy slant to this article...yeah right, even if the economy is really improving, no one other than the already rich and/or foolish are going to buy lux items like these now.

Aug 21, 2012 3:11PM
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i would like to know how much these actually cost to make in these sweat shops?  LeBron i was starting to gain some respect for you and now it has been flushed down the toilet.  The shoes should come with a Tee shirt that says . . . . You are a Witness (to my stupidity) !!!!!
Aug 21, 2012 3:10PM
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This irritates to no end! I own a business. I make VERY good profits (which is what I make after everything is paid that i owe) , so wildfires and international issues that affect the price of oil cause me to make less profit. I already am used to exploiting other people to get these huge profits and I don't want to make 33 million less dollars throughout this year, so  A.) I do the best I can with the intelligent minds I have hired, B.) Maybe close a few facilities that are overseas and maybe open a few smaller facilities over here ( i know the workers get paid more, but at least these workers or their kids might buy some of my product with the money that I put into the communities) That will ease shipping costs and tariffs. or C.) I raise the prices of my products, all the while still exploiting people for those huge profits that have to rise instead of fall. ( <<<  lol...ok)

 

Sorry, Nike I don't play ball anymore, but I have three children two of which are boys, (my daughter also likes soccer) They ask me why I don't buy them Nike products....I just tell them I don't support exploitation. I don't support economic engineering of a poor starving country, and, when I look at their bright, shiny faces, and I compare them to the ones I have seen in videos about sweatshops and they aren't bright at all. They are covered in sweat and filth all for some "big shot" to make his profits. I tell my kids, "No." I have been telling corpses (my short for corporations), "No!" , for a while now and I will continue. I hope others will to. I hope other people make this new "business model" of Nike a joke. I hope it doesn't work at all.

Aug 21, 2012 3:09PM
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I am just shocked.  I know that you are supposed to make money.  But Lebron...let's be honest...you are from the hood just like alot of us...You know that this is bad.....I pray that you sell 1 shoe....this is just sad man...very sad....disappointed...i know people are going to buy the shoes for their kids with their last dollar to find out that they can only jump 12 inches.....and the shoe will be a constant reminder of your lack of vertical.....HORRIBLE DECISION!!
Aug 21, 2012 3:06PM
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i will never buy no lebron sneakers for 315... im not insane they dnt even look that good.. just give me my mj's and im good
Aug 21, 2012 3:06PM
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Yeah, that's what Nike needed, some "more expensive" sneakers to go with their already outrageously expensive one's, you know, so they can take advantage of the fantastic economic recovery, er, Depression that is taking place in this country. Smart move!!
Aug 21, 2012 3:05PM
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I wouldn't pay one dollar for those shoes, they are one of the ugliest shoes I have seen in a while.
They probably cost five dollars to make and the rest is for the name.
I can buy shoes that look better, are more comfortable, and cost about 80 dollars.
I hope the kids are smart enough to know that  there are more important thing in life than a over-priced pair of ugly shoes that a overpaid person that plays a GAME gets paid to put his name on. 
Aug 21, 2012 3:03PM
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What's the big deal about the price? There are many brands of shoes that run in the same price range- Dolce and Gabbana, Givenchy and Fiorentini to name a few. These just happen to be sneakers. Nike is just doing the American dream- making money- capitilism at its best. That's what a business is about, right? Turning a profit? 
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No doubt there will be people cashing in food stamps and signing up for welfare, using the latest I-phone or I-pad and wearing these wastes of money, ............. you know, the terminally stupid!
Aug 21, 2012 2:57PM
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Do they make you run faster than a speeding bullet, are they more explosive than a locomotive, make you leap tall buildings in a single bound, look, it’s a bird, no it’s a plane, no, it’s a fool if you pay $300 plus for those shoes.

Aug 21, 2012 2:57PM
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Don't buy the shoes! Put money aside for your children's future instead...Oh I forgot, we live in an entitlement age ---people don't have to prepare for their future. Just use your money to look good now and ask the government to provide everything else.
Aug 21, 2012 2:57PM
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How many kids are going to be shot for their "LeBrons"?
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I have to admit that I used to be someone who waited on line and spend lots on sneakers like these. About 15 years ago, there were shoes released in the name of Shaq and Charles Barkley that cost about $150 a pair, but I still felt that I had to have them because they were the 'coolest' materials one could have. Having them, showing them off to others just added to it. Now I realize that, not only was it foolish, but a total waste of hard-earned money. Where are these $150 now? Probably in some executive's pocket gaining interest. Where will these $315 be years from now? Probably in the same place. Those who choose to spend this much on shoes are nothing more than droned people who don't think things through. Your hard earned money is hard earned, it shouldn't be easy for some company to easily take it from you.
Aug 21, 2012 2:56PM
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Can I use my welfare card to purchase a pair? This is definitely a 'must have' if you don't have a job and are not interested in getting one either.
Aug 21, 2012 2:54PM
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wont catch me rockin those ugly garbage.
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