Nike reportedly sold its digital products subsidiary RTFKT in December, following up on its plan to “wind up” its NFT department by the end of January.
The athletic wear giant had previously announced last year that it would end its non-fungible tokens (NFTs) operations and other blockchain-based initiatives. The sale was executed just over a year after the company commenced the shut down of the “Artifact” unit.
RTFKT’s official X account shared a press statement on X in 2024, in which the subsidiary said it was proud of its achievements during its time under Nike.
“We’ve built a community where traditional boundaries between physical and digital creativity dissolved, where artists and collectors redefined what the future could be. Looking back, we’re incredibly proud of everything we’ve achieved together,” the post read. “RTFKT is becoming what it was always meant to be, an Artifact of cultural revolution.”
Nike ends NFT production after quarterly sales drop shock
Nike had announced on Medium back in September that it would temporarily halt NFT products developed by RTFKT. The company stopped creating blockchain-based collectibles, but insisted that partnerships with video game companies to produce in-game wearables with RTFKT’s design would continue.
CEO Elliott Hill’s second year is seemingly taking the clothing and footwear company away from digital assets and back to traditional sports, athletic products, and rebuilding relationships with partners such as Dick’s Sporting Goods and Foot Locker.
RTFKT was acquired by Nike in 2021 under former CEO John Donahoe, who backed direct-to-consumer and digital sales channels. The acquisition was meant to expand the sportswear brand’s presence in collectibles and metaverse markets during the 2020-2021 NFTs and digital worlds bubble.
In a brief statement, Nike confirmed that the sale of RTFKT was effective December 16 and it was “launching a new chapter for the company and its community,” but the buyer and terms of the sale were not disclosed.
“Nike continues to invest in delivering innovative products and experiences in physical, digital, and virtual environments,” the statement added, which could mean the company intends to continue with its digital footprint despite exiting the NFT-specific market.
Although CEO Hill has not yet publicly detailed his plans for the company in 2026, the sale of RTFKT spells Nike’s return to a much-familiar playbook of athletes and sports performance.
Nike’s financial performance report for the quarter ending November 30 saw the company make $12.4 billion in sales, exceeding Wall Street’s predictions of $12.2 billion. Its earnings per share reached $0.53, well above the $0.37 consensus estimate, but the Converse brand counted a 30% drop in quarterly sales.
RTFKT lawsuit still continues, co-founder’s demise legacy lives on
RTFKT’s co-founder Benoît Pagotto passed away last year at the age of 41, as first reported by Philippe Rodriguez through a LinkedIn post. The founding partner at Avolta Partners, who advised on RTFKT’s sale to Nike in 2021, said Pagotto was “super creative, discreet and humble.”
Fellow co-founder Steven Vasilev later confirmed Pagotto’s death on X, writing that “the vision, mission, and inspiration he gave to the world will live on forever.”
Amid the sad news, Nike is still facing a class action suit for abruptly exiting the NFT market. Some purchasers of Nike-themed NFTs and other crypto assets filed a proposed lawsuit in Brooklyn federal court in April last year.
The plaintiffs were led by Australian resident Jagdeep Cheema, who claimed that Nike’s closure of RTFKT caused the value of their NFTs to collapse, resulting in financial losses. Cheema’s attorneys are seeking “unspecified damages of more than $5 million” for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
According to the law filing, the NFTs were unregistered securities sold without approval from the US Securities and Exchange Commission (SEC). The plaintiffs accuse Nike of using “its iconic brand and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT sold,” much similar to what caused Dapper Labs to settle with investors after issuing NBA Top Shot NFTs in 2023.
They also claimed to have purchased the NFTs expecting their value would grow, and had the buyers known the assets were unregistered securities, they would not have invested.
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Source: https://www.cryptopolitan.com/nike-sells-digital-products-subsidiary-rtfkt/
