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Supreme is acquired by Essilor Luxottica for $1.5 billion.
new york
CNN
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Supreme, the trendy streetwear brand beloved by celebrities and cool kids, has been sold to an eyewear company for a price significantly lower than it was just four years ago.
Italian company Essilor Luxottica announced on Wednesday that it would acquire Supreme for $1.5 billion in cash from VF Corporation (VFC), the parent company of Vans and Dickies, which acquired the brand in 2020 for $2.1 billion.
“Supreme fits perfectly into our innovation and development journey, providing us with a direct connection to new customers, language and creativity,” EssilorLuxottica said in a statement. The brand will have its “own space” within the portfolio and will mark the company's first acquisition of a clothing brand.
While Essilor Luxottica is a name not many shoppers know, the glasses it makes are. Its collection includes Oliver Peoples, Ray-Ban, Oakley and Persol, and it also has licensing deals with Chanel, Coach and Dolce & Gabbana.
Founded in a New York skateboard shop in 1994, Supreme has made its mark with skateboarders and hip-hop fans alike, and its apparel has also become popular with millennial and Gen Z shoppers. The Carlyle Group bought half of the company for $500 million in 2007.
VF Corp. shares rose nearly 7% in premarket trading. The company The company said there were “limited synergies” between Supreme and its own brands, making a sale a “natural next step.”
Neil Saunders, a retail analyst at GlobalData, said the sale makes sense. CNN reported that the company had previously lost money because it “paid high prices for trophy assets that it didn't know how to develop or nurture.”
“Acquiring the brand at a time when the streetwear aesthetic is in decline is risky and it's unclear what EssilorLuxottica plans to do to revive Supreme's fortunes,” Sanders said. The Italian company “has strong distribution and brand management capabilities,” the company said.
Observers say the brand's ubiquity and declining resale value on websites like StockX have hurt its popularity.
