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Nike Launches Meta World Amid Shoe-Shredding Allegations

A group of German journalists that spent weeks looking into Nike’s returns process is claiming that one of the U.S. footwear giant’s major circularity initiatives shreds like-new shoes.

If true, this could place Nike in violation of a rule the German government introduced last year that forbids the destruction of serviceable returns. Should the authorities decide to investigate and find the company did break the law, Nike could face a fine of up to 100,000 euros, or roughly $113,648, according to the report—a collaboration between journalists from German outlets NDR, ZEIT and Flip.

The investigation is just one installment in a larger project exploring what happens to shoes at the end of their lifecycle. In every case, the journalists embed a GPS tracker into the sole of each shoe and then feed them into a given disposal channel, whether that’s a used clothing container or a brand-operated collection service.

In last week’s case, the team followed a pair of old Nike sneakers it deposited in an in-store Nike Grind collection box to a third-party recycling facility in Belgium. Looking in through an open door, they say they watched workers prepare what looked like brand-new shoes to be shredded. In some cases, this included removing the padding paper with which new shoes are often packed. When they spoke with a supervisor, he reportedly confirmed that most of the shoes his facility receives are new.

In a follow-up experiment, the team bought a pair of new basketball sneakers, embedded them with tracking devices and then immediately returned them. They claim there were no visible defects or flaws. Once again, the journalists tracked the shoes to the Belgian facility.

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Posing as potential customers, they scheduled a guided tour through the facility. Inside, they again found large numbers of what looked to be new shoes, including one pair with a return slip still attached. When one of the journalists mentioned to an employee that all the sneakers are new, the worker reportedly said this was often the case.

Introduced in 1992, the Nike Grind initiative claims to give manufacturing scrap and end-of-life shoes a second life, whether that’s as a playground surface or as material for a brand-new sneaker, such as February’s Cosmic Unity. According to Nike’s website, 130 million pounds of Nike Grind have been recycled into partners’ products since the program’s inception.

One of the journalists working on the investigation confronted Nike chief sustainability officer Noel Kinder at the COP26 climate conference in Glasgow earlier this month. According to the team’s report, Kinder seemed surprised and promised to take care of it.

When asked to comment on the German journalists’ account, a Nike spokesperson asserted that the “vast majority of footwear” consumers return is resold. “To keep athletes safe and performing with confidence,” however, the company said all returns are analyzed for damage or tampering. Those that show sign of damage or unacceptable wear are sent for recycling.

“Footage and reporting shared by media outlets demonstrates that a new Nike performance basketball shoe was ordered from and cut open and tampered with when a GPS tracker was inserted into the product before being returned,” Nike said. “This could pose a safety hazard for athletes and consumers if resold. Per our policy and to keep athletes and consumers safe, tampered with footwear is sent for recycling at our Nike Grind facility.”

Though Nike did not directly address the large number of what appeared to be new shoes the journalists claim they saw, it said it “sends wear test samples, defective product, sales samples and other shoes that are not fit for performance to Nike Grind.”

This spring, the company introduced Nike Refurbished, a new program that spruces up and resells pre-owned sneakers. Initially available at eight locations nationwide, the program was scheduled to expand to 15 locations by the end of April. More than half a year later, Nike Refurbished is available at 25 locations, according to the brand’s website. The company said it plans to pilot the program in Europe, the Middle East and Africa next month.

“We recognize that there are always opportunities to do more in service of the planet,” Nike said. “Refurbished allows Nike to extend the life of products that were gently worn before being returned by tidying them up and making them available for shoppers at a reduced price.”

Roblox welcomes Nikeland

Meanwhile, Nike, like Vans before it, has partnered with the popular virtual platform Roblox to create its own metaverse mini-world.

Unveiled Thursday, Nikeland draws inspiration from the company’s real-world Oregon headquarters, while also introducing detailed arenas where the Roblox community can compete in classic games like tag, the floor is lava and dodgeball. For those with a creative bent, the Nikeland tool kit allows users to design their own mini-games from “interactive sports materials.”

The virtual environment also includes a “showroom” stocked with digital Nike shoes, clothes and accessories, including classics like the Air Force 1 and Nike Blazer, as well as new drops like the Air Force 1 Fontanka and the Air Max 2021. The store will also offer a free exclusive Nike cap and backpack that can be worn anywhere on Roblox.

Nikeland will give the company a direct line into a world that has grown incredibly popular with today’s youth. This past quarter, the platform saw its number of daily active users climb to 47.3 million, a 31 percent increase over the prior year. Of that number, 23.1 million were under 13 and 23.8 million were over 13.

Though Nike’s Roblox debut arrives just a few weeks after the company made headlines for a series of trademark applications for “on-line, non-downloadable virtual” goods “for use in virtual environments,” the company’s digital ambitions date back years. Since 2019, it has filed multiple patent applications related to “cryptographic digital assets.” Though some are still pending, the United States Patent and Trademark Office (USPTO) has granted at least three, one in 2019 and two since June.

The patents—filed long before non-fungible tokens (NFTs) exploded into the public consciousness earlier this year—repeatedly reference what Nike calls “CryptoKicks,” virtual collectibles backed by unique, non-fungible tokens. In some implementations, the patents note, these CryptoKicks could be imported into one or more other digital platforms, such as a skin on a video game character.