Nike’s NFT Nightmare: Converse Crashes, CEO’s New Era Begins!

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The sale comes as Nike’s Converse brand reported a sharp 30% revenue decline, signaling a major strategic shift under CEO Elliott Hill’s leadership back to core athletic performance products. 🚨💸

Confirming the Sale

Nike confirmed the RTFKT sale in a brief statement, calling it “a new chapter for the company and its community.” The company did not reveal who bought the digital products studio or how much they paid for it. According to Nike’s announcement, the company plans to “continue investing in delivering innovative products and experiences across physical, digital and virtual environments.” 🤷‍♀️✨

The December sale happened roughly a year after Nike first announced plans to shut down RTFKT’s operations. The NFT studio announced in late 2024 that it would wind down by the end of January 2025, ending a short but expensive experiment in digital collectibles. 🕰️💸

What Was RTFKT?

Nike acquired RTFKT in December 2021 during the peak of the NFT and metaverse boom. RTFKT, pronounced “artifact,” was founded in January 2020 by Benoit Pagotto, Chris Le, and Steven Vasilev. The startup raised $8 million in funding led by Andreessen Horowitz and was valued at $33.3 million at the time Nike bought it. 🧠💰

The studio made digital sneakers and collectibles that sold as non-fungible tokens on the Ethereum blockchain. Some RTFKT virtual sneakers sold for over $80,000. The company’s CloneX NFT avatars, created with artist Takashi Murakami, generated over $100 million in sales within two months of their launch. 🎨👟

RTFKT also released physical smart sneakers called Cryptokicks iRL, which featured auto-lacing technology, customizable lights, and wireless charging. These shoes connected to NFTs, blending digital ownership with real-world products. 🔌🧬

Elliott Hill’s Strategic Turnaround

The RTFKT sale reflects a broader change in Nike’s direction under Elliott Hill, who became CEO on October 14, 2024. Hill, a 32-year Nike veteran who came out of retirement to lead the company, replaced John Donahoe. Donahoe had pushed Nike heavily into direct-to-consumer digital sales and experimental technologies like NFTs during his tenure. 🕵️‍♂️🏁

Hill’s “Win Now” strategy focuses on five main areas: company culture, product innovation, marketing, marketplace balance, and in-person experiences. The plan reorganizes Nike by sport, putting running, basketball, football, and training at the center of the business. 🏃‍♂️🏀

According to Nike’s Q2 fiscal 2026 earnings, the company is rebuilding relationships with wholesale partners like Dick’s Sporting Goods and Foot Locker. Nike had previously cut ties with many retailers to focus on selling directly through its own stores and website. Hill is reversing that approach. 🛍️🤝

“Fiscal year ’26 continues to be a year of taking action,” Hill said during the December earnings call. “We’re in the middle innings of our comeback.” 🎉⚾

Converse Struggles Continue

Nike’s Converse brand faced significant challenges in the most recent quarter. Converse revenues dropped 30% to $300 million in Q2 fiscal 2026, which ended November 30, 2025. The brand has struggled for several quarters, with declines across all territories. 😢📉

The sharp drop in Converse sales adds pressure to Nike’s overall performance. While Nike’s total revenue for Q2 was $12.43 billion, beating Wall Street expectations, the company still faces major challenges. Net income fell 32% to $792 million, and gross margin decreased by 3 percentage points, primarily due to higher tariffs. 💸📉

Nike’s wholesale revenue grew 8% to $7.5 billion during the quarter, showing Hill’s strategy is gaining some traction. However, Nike Direct sales fell 8% to $4.6 billion, with digital sales down 14%. This marks the seventh straight quarter of declining digital sales. 📈📉

Legal Challenges and NFT Market Collapse

Nike faces a class-action lawsuit filed in Brooklyn federal court on April 25, 2025, over the RTFKT shutdown. Lead plaintiff Jagdeep Cheema, an Australian investor, claims Nike’s decision to close RTFKT destroyed the value of Nike NFTs without proper notice or compensation. The lawsuit seeks damages of at least $5 million. ⚖️💸

The plaintiffs argue that Nike violated consumer protection laws in New York, California, Florida, and Oregon. They claim the NFTs were unregistered securities sold without approval from the Securities and Exchange Commission. Some NFTs stopped displaying images correctly after the shutdown announcement, making the digital assets essentially worthless. 🧠💥

The lawsuit comes as the broader NFT market has collapsed. According to Coingecko data, the NFT market lost over $12 billion from its April 2022 peak. Daily sales volume has dropped to around $4 million, a massive decline from the billions traded during the 2021-2022 boom. 📉💸

Co-founder Benoit Pagotto passed away in 2024 at age 41. Fellow co-founder Steven Vasilev confirmed his death, writing that “the vision, mission and inspiration he gave to the world will live on forever.” 💔🚀

The Road Ahead for Nike

Nike’s exit from NFTs represents a clear shift away from speculative digital markets toward proven athletic products. The company beat earnings expectations in Q2, with $12.43 billion in revenue compared to the expected $12.22 billion. Earnings per share reached $0.53, well above the predicted $0.38. 📈💰

However, significant challenges remain. Sales in Greater China dropped 17% to $1.42 billion, marking one of Nike’s worst performances in that crucial market. The company is implementing targeted strategies in key Chinese cities like Beijing and Shanghai but acknowledges the turnaround will take time. 🇨🇳⏳

North America showed the strongest performance with 9% revenue growth to $5.63 billion. Hill credits this to rebuilt relationships with wholesale partners and a renewed focus on athletic performance products rather than lifestyle sneakers. 🏀👟

Nike continues working on selective digital partnerships with gaming companies like Fortnite and EA Sports, focusing on in-game items rather than standalone NFT collectibles. This approach maintains a digital presence without the operational complexity of running an NFT-focused business. 🎮🕹️

Back to Basics

Nike’s sale of RTFKT closes a brief chapter in the company’s history that cost millions and resulted in legal battles. Under Elliott Hill’s leadership, Nike is returning to what built the brand: athletic innovation and performance products. While the NFT experiment failed, the company’s core business shows signs of stabilization as it refocuses on sports, athletes, and wholesale partnerships. The Converse struggles and China challenges remain significant hurdles, but Hill’s back-to-basics approach may prove more sustainable than chasing the next digital trend. 🏋️‍♂️🏁

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2026-01-07 23:35