From acquisition to abandonment, why did Nike’s Web3 brand RTFKT close?

Author: Zen, PANews

In the past few years, the exploration of digital fashion and Web3 fields has attracted a lot of capital and creativity, and one of the most representative projects is RTFKT. As a team that breaks through tradition, RTFKT has made waves at the intersection of blockchain and fashion with its unique digital creativity and NFT projects, attracting the attention of Nike and achieving merger and acquisition in 2021. However, although RTFKT had high hopes, its role in Nike's strategic transformation has never achieved the expected success.

The MNLTH

RTFKT: An unexpected ending

The MNLTH In this sale, RTFKT is also showing its sincerity. The new series abandons traditional Nike shoe styles such as Air Force 1, and instead adopts more low-key shoe styles such as Undead Evo. The midsole of this shoe is similar to that of a reptile. Chin, molars, etc., full of creativity and personality.

With the official launch of the MNLTH X project, RTFKT’s encryption journey has also reached its end. However, when faced with RTFKT’s final farewell, most people in the community obviously did not pay the bill. One user said: "Shoes are so cool, but I don't understand how it feels to spend more money on a pair of shoes from a company that no longer exists in addition to the money spent on NFT and physical goods." There are also many users who bluntly said that RTFKT is a rug behavior, and urged the project team to close the account quickly and forget about it.

In early December 2024, RTFKT issued an announcement on X (formerly Twitter), announcing that it would terminate operations and that its Polygon-based virtual creation platform Swoosh would continue to exist in the Web3 field. "RTFKT is not over, it is becoming what it should have been - a relic of the cultural revolution." RTFKT said in a statement. Amid the commotion, many users also expressed the hope of taking over its flagship NFT series Clone X to replicate the story of Luca Netz acquiring Pudgy Penguins and turning it into the top NFT project.

Clone X is a PFP type project based on Ethereum, launched in 2021 by RTFKT in collaboration with Japanese contemporary artist Takashi Murakami. In fact, Clone Amid the downturn in the NFT market, the series has continued to slide from its historical high of $63,000 in 2022 to 0.24 ETH today, worth less than $1,000. In addition to the sluggish performance of the market itself, RTFKT was eliminated from Nike's series of brands and businesses, which may also be related to the strategic adjustment of this leading sports brand, which starts with acquisitions.

Why did sports giant Nike acquire RTFKT?

In December 2021, Nike acquired RTFKT for an undisclosed amount. John Donahoe, Nike CEO and President at the time, said that this was a step in accelerating “Nike’s digital transformation, allowing us to operate at the intersection of sports, creativity, games and culture.” serving athletes and creators." Donahoe also said that Nike’s plan is to invest in the RTFKT brand, serve and develop its innovative creative community, and expand Nike’s digital footprint and capabilities. "

The strategic layout of acquiring RTFKT and entering the new digital field of NFT may have its origins in 2017. During this year, Nike announced a "consumer direct attack" strategy, which included increasing the company's digital influence and establishing more "one-to-one connections" with consumers.

In 2020, when announcing Donahoe's appointment, Nike's then-CEO Mark Parker said that Donahoe was "perfectly suited" to achieve these goals. Judging from his resume, Donahoe is indeed the best candidate - he served as the market president of the e-commerce platform eBay as early as 2005 and was responsible for its core business; he served as eBay's CEO from 2008 to 2015.

When Donahoe joined Nike, the sports giant was in full swing to expand its DTC (Direct-to-Consumer) business, and digital business provided Nike with the ability to directly reach and serve consumers. Digital channels not only eliminate the intermediate links of traditional wholesale and facilitate the collection of data on consumer preferences and habits, but also enhance the interactive experience between consumers and brands. This has led Nike to increase its investment in digital business, and the acquisition of RTFKT was also completed in this context.

The story behind: Nike’s continued downturn and “change of dynasties”

In the past few years, Nike's transformation to DTC has not been successful. Nike led by Donahoe has also experienced repeated inclination and dependence on traditional wholesale business and DTC business. In 2021, Nike began to cut wholesale partners to focus more on DTC business. Cutting too quickly will result in too high inventory and necessitating deep discounts. After realizing that it had gone too far, Nike began to bring wholesale partners such as DSW back into its business scope in 2023. As part of its transformation to DTC and in order to cut costs amid declining sales, Nike has conducted multiple rounds of layoffs in the past two years, and many "senior employees" have also been affected.

In March 2024, Nike announced its first digital business decline in nine years, and Nike's market value has shrunk by nearly half in the past three years. Due to poor performance, John Donahoe chose to leave in October 2024, and Nike invited back Elliott Hill, a senior employee of the company, as his successor. Hill has worked at Nike for more than 30 years, working his way up from a clothing sales intern to president of consumer marketing. Not long after Donahoe became the head of Nike, Hill chose to leave.

Pictured on the left is John Donahoe, pictured on the right is Elliot Hill

Elliot Hill changed the company's business focus after taking office. He promised that the company would shift its focus and resources to make "sports once again the North Star of Nike." Hill said Nike had "lost its dedication to sports" and vowed to get the company back on track. He also hopes to work to strengthen an already sluggish wholesale business and reverse some of the strategic missteps under the previous CEO, such as souring relationships with retailers such as Foot Locker.

As for RTFKT, which is an old legacy of the Donahoe era, regardless of its importance or business scale, it is not worth mentioning compared to the core business that Hill values. In Nike's official press release announcing Donahoe's resignation as president and CEO, the RTFKT logo was not included in its brand lineup. It is only a matter of time for Nike to withdraw from the NFT field.

It is worth mentioning that Nick O'Neill, co-founder of the NFT project BoDoggos, who seems to have known the "inside story" for a long time, tweeted in March 2024 that RTFKT would be closed by the end of the year. The community who couldn't believe this immediately criticized him verbally. RTFKT Lianchuang @Zaptio even personally mocked: "It seems that I also missed the shutdown memo" and said that Nick was completely nonsense.

In the end, time tests everything.