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A global pandemic might not seem the best moment to try to sell ultra-pricey trainers, least of all when the global economy is predicted to shrink 5 per cent this year.

But next week Christie’s, the auction house, will conduct a cyber auction of a dozen pairs of Michael Jordan’s old shoes — and the top lot is expected to fetch $350,000 to $550,000. This follows a digital auction organised by Sotheby’s in May of the basketball star’s old Nike Air Jordan 1s. They fetched $560,000 — a record in the second-hand sneaker world, and a level that might make even billionaires feel dizzy.

The projected Jordan price partly reflects idiosyncratic factors: the ESPN documentary The Last Dance has reinvigorated mania around the star this year. But it also symbolises a bigger trend. Amid the Covid-19 economic pain, some luxury niches are still booming — and asset prices are jumping in unexpected ways. This is hard to track with precision. The luxury sector is opaque, and activity is doubly hard to measure now that spending is becoming more discreet and migrating into new areas. 

Bricks-and-mortar luxury retailers such as Richemont and Chanel reported pain this year, but there are now widespread reports that boats are flying off the shelf — or their moorings — in parts of the US and Europe. The price of exclusive rural retreats in places such as Cornwall, in the UK, or the Hamptons in America, is surging. Discreet online sales of fine wines are under way, with sales soaring.

Some of this may be the wealthy wanting to cocoon in style, but the trend in art is particularly striking. Before the pandemic, the big auction houses had refused to hold large-scale sales online, fearing it would be impossible to replicate their glitzy, exclusive evening events in cyber space. So when Covid-19 first hit, they trimmed staff and salaries, braced for a long collapse in demand.

A pair of Michael Jordan’s old shoes are expected to fetch $350,000 to $550,000 at Christie's
A pair of Michael Jordan’s old shoes are expected to fetch $350,000 to $550,000 at Christie’s © Christie’s

But last month Sotheby’s launched its first online experiment — a telling sign of how Covid-19 is forcing even once-reluctant business sectors to dash into digital. To the surprise of art lovers, the auction house sold $234.9m worth of postwar and contemporary pieces, at the very top end of the predicted range. A piece by Francis Bacon called “Triptych fetched $84.6m, beating the $80m estimate. 

Christie’s also staged digital auctions this month, netting $420.9m and breaking several records. Roy Lichtenstein’s “Nude with Joyous Painting” sold for $40.5m, above expectations. “We’ve been incredibly impressed . . . how resilient the market has been,” said Sotheby’s boss Charles Stewart.

Art prices may dip in the autumn, when more supply emerges. But thus far the activity underscores the fact that the pandemic has not only created numerous losers, but winners too, and some of the latter remain ready to spend. 

The fate of companies and people on the right side of digital transformation is exemplified by the booming fortunes of Jeff Bezos, Amazon’s CEO. But he has company. As quantitative easing prompts investors to hunt for new places to put their money, the prices of many assets are jumping. Tech stocks are an obvious beneficiary. So are some old-fashioned non-digital assets, whether art or gold, whose price has jumped 20 per cent this year.

This creates a self-reinforcing cycle: the wealthy are becoming wealthier. Back in 2012, the Bank of England calculated that the richest 5 per cent of the British population had enjoyed most of the gains from the early rounds of quantitative easing, because they owned 40 per cent of assets. If this politically sensitive calculation were repeated now, the trend might be more stark, given the rising scale of central bank intervention.

“Wages have been stagnant while asset prices have been ballooning, resulting in the asset owners (the rich) [becoming] richer and the working class being left behind,” Pengana Capital observed in a recent note. It predicted this will lead to further “bar-belling” in the consumer goods sector. Mid-tier retailers will suffer, but discount stores and luxury niche goods will outperform.

Of course, this trend creates another risk. If inequality keeps rising there will be a political backlash, with voters demanding measures such as wealth taxes. But absent significant government intervention, the combination of Covid-19 and central bank interventions aimed at combating the pandemic’s economic effects is creating a more unequal world. That has ugly implications, which will be hard for the global elite and policymakers to dance around or leap over, whatever they think about the merits of $550,000 shoes.

gillian.tett@ft.com

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