Nike has issued new safety rules to stores before the release of its LeBron James high-tech basketball shoe, mindful of the crowds of shoppers who line up for the popular sneaker releases.
Retailers such as Foot Locker who sell the shoes will have to open their doors at 8 a.m. instead of the usual time of midnight, according to a company memo, the Wall Street Journal reported. It was prior to previous midnight releases when brawls took place in California, Florida and other states for the release of retro Air Jordan and Foamposite Galaxy shoes.
“If a retailer offers Nike products for sale under circumstances where the retailer knows or should know that consumer response is likely to be exceptionally high, it must do so in a prudent and responsible way,” the company memo stated, according to the Journal.
The Beaverton, Ore.-based company is also banning stores from displaying photos or descriptions of new products before their launch dates, the WSJ reported.
Brian Strong, a spokesman for Nike, provided a statement to ABC News, saying, “Consumer safety and security is of paramount importance. We always encourage anyone wishing to purchase our product to do so in a respectful and safe manner, and constantly evaluate our distribution policies with a view to ensuring a positive consumer experience.”
Requests for comment from Foot Locker and Dick’s Sporting Goods were not returned.
Many of the shoes with limited releases have sparked a growth in secondary markets, in which customers who wait hours or longer to buy the shoes then sell them online.
In April, Nike launched an online reservation system through Twitter for a limited number of shoes.
The highly anticipated LeBron X Nike Plus basketball sneaker, expected to be released this fall, was initially expected to be the most expensive yet. It was first reported by the Journal that it would retail for about $315 and have motion sensors that measure how high shoe-wearers jump. Later, Brian Strong, a spokesman for Nike said the suggested retail price of the LeBron X shoe is only $180.
Analysts say Nike is raising prices 5 to 10 percent because of rising labor, production and shipping costs, the Journal reported.
Paul Swinand, equity analyst with investment firm Morningstar, said he isn’t surprised by the cost of the newest LeBron James shoe and overall price increases, especially if they can be re-sold for thousands of dollars at times.
“Part of the whole shtick of the marquee sneaker products is they create a scarcity, a buzz, or a hype. Part of the outrageousness of them is that they are expensive,” he said. “If they were a great bargain at $59.99, they wouldn’t be as rare.”
The company reported lower profit margins, higher production costs and restructuring charges in its Western European division when it released its fourth quarter earnings in late June. Nike reported revenue rose 12 percent to $6.5 billion, the largest revenue quarter in the company’s history, it said.
Shares of Nike were trading around $96.18, up 0.43 percent in afternoon trading.