Italian eyewear group EssilorLuxottica has reached a definitive agreement for the purchase of streetwear juggernaut Supreme for $1.5 billion in cash, the company said in a release on Wednesday.
The deal is expected to close by the end of the year. The deal was struck at a significant discount to the $2.1 billion VF Corp. paid when it acquired Supreme in 2020.
That purchase cemented Supreme’s position in fashion’s mainstream, but raised questions about whether it could scale while preserving the counterculture credibility that helped power its rise. In recent years, the brand has also had to contend with the growth of new, cutting-edge streetwear labels.
Many luxury brands and consumers have also pivoted away from logo-heavy hoodies, puffers and sneakers, which drove interest in the category throughout the 2010s, in favour of more muted and elevated styles. Even die-hard streetwear hypebeasts grew fatigued at the relentless slew of weekly drops and logo-swap collaborations that once had fans queuing up for blocks outside Supreme stores around the world. Whereas drops on the Supreme app used to be sold out in seconds, products now sit available for weeks on end.
The brand generated revenues of $523.1 million in the year ended March 2023, down from $561.5 million the year before, while profit also fell, according to VF Corp, which didn’t break out figures for Supreme in its financial year ended March 2024.
In February, when VF Corp. announced it would take a strategic review into its portfolio, it was clear that Supreme stood out as a candidate to be offloaded.
”Given the brand’s distinct business model and VF’s integrated model, our strategic portfolio review concluded there are limited synergies between Supreme and VF, making a sale a natural next step,” said VF chief executive Bracken Darrell in Wednesday’s statement.
Stay tuned to BoF for updates on this developing story.
