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 1:44PM
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Of course the FIRST comment is more spam for some stupid low-class dating site.

MSN, this should be REALLY embarrassing that you have absolutely ZERO control over this. Aren't you guys part of Microsoft? And yet you cannot figure out some automated way to keep this garbage out of your comments?

Can you at least assign some interns to curb it and make it look like you have some clue how to run a website?

Seriously, how long has this been going on absolutely uninhibited? GET WITH IT!

Aug 21, 2012 2:18PM
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$315 for a pair of shoes.  Wonder how that breaks down.

 

$150 for LeBron.

$100 Nike CEO's and upper management.

$50.00 parts and material.

$14.50 to the store that sold them.

$0.50 for the kid that actually made them.

 

There's your new American dream under your corporate master job creators.  Driving towards wage equalization between first and fourth world countries.

Aug 21, 2012 1:59PM
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I think Nike should charge 2000 USD for them. It will bankrupt foolish people faster, Darwin at his best.

 

 

Aug 21, 2012 10:27PM
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And yet many of those who are unemployed or on welfare will be the first ones waiting in line for those shoes. Ridiculous!
Aug 21, 2012 2:32PM
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What a bargain for footwear made in a foreign sweatshop! Especially footwear that's not really any better than most $50 pairs. I wonder how long it will take for thugs to start shooting each other for them. People are such moronic tools.
Aug 21, 2012 2:06PM
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LMAO, how can you peddle basketball sneakers to everyday people for $315.00 and claim to care about the well being of these people? BUT, these same people who can't afford to pay for schooling, will find a way to get the money to get them. I can't even be mad at Nike for trying this. A fool and his money..... Perfect case example right here.
Aug 21, 2012 5:12PM
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We can sit up here and comment a million times about these sneakers.  However on their release date you can go to any mall in a predominantly black neighborhood across the US and I guarantee people will be in droves to buy them.  Half of them can't read, half of them have kids who can't read, half of them are unemployed, half of them are drastically undereducated, half of them place no value on investments that will appreciate in the long run to have a foundation in line for their kids and future generations, half of them think that improving one's self and community any type of upward mobility is corny and only for white people...I can go on....but they'll have these sneakers on and fool themselves that they're 'that n***a' becuase they have em on. Instead of spending that $315 on maybe books or anything to advance themselves they'll sit there and say it's the white man's fault for not advancing.

 

And that's coming from a black man who used to work for Nike overseas in London.

Aug 21, 2012 2:14PM
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315 they have lost their minds an anyone who buys em is a complete fool!!!

 

Aug 21, 2012 2:00PM
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Wait just a minute!  $315.00 for a pair of sneakers? ..... Is it LeBron or LeMoron?.....just sayin'
Aug 21, 2012 2:57PM
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How many kids are going to be shot for their "LeBrons"?
Aug 21, 2012 10:47PM
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They'll be tossing snowballs in HELL before the thought even enters my mind. I haven't bought Nike's in years and see no reason to start now. Overpriced merchandise with an overinflated and overpaid player's name attached.
Aug 21, 2012 2:00PM
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Since when is consumer spending recovering??
Aug 21, 2012 10:21PM
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THIS EXORBITANT PRICE INCREASE FOR SNEAKERS IS GOING TO COST THE LIVES OF AFRICAN AMERICAN KIDS!!!! JORDAN AND LEBRON NEED TO TAKE A STAND AGAINST THIS!!!! #justwatch #smh

Aug 21, 2012 2:31PM
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 7:58PM
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Its usually the low income fools that spend that kind of money for no value crap.....
Aug 21, 2012 10:44PM
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Only an idiot would pay that much for a pair of basketball shoes.  I'm done buying Nikes.
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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 22, 2012 2:18PM
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Anyone who buys these is a fool with more money than brains.
Aug 21, 2012 2:10PM
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The sneakers come with a cheap handgun to protect yourself against thieving hood rats.

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