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Supreme was bought by EssilorLuxottica for $1.5 billion.
New York City
CNN News
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Supreme, the trendy streetwear brand beloved by celebrities and cool young people, has been sold to an eyewear maker for a fraction of what it cost four years ago.
Italian company EssilorLuxottica announced Wednesday that it is buying Supreme for $1.5 billion in cash from VF Corp. (VFC), the parent company of Vans and Dickies, which bought the brand for $2.1 billion in 2020.
Supreme “is perfectly aligned with our journey of innovation and development, offering us a direct connection to new audiences, languages and creativity,” EssilorLuxottica said in a statement. The company added that the brand will have its “own space” in its portfolio and marks its first apparel brand acquisition.
EssilorLuxottica is a name that is less familiar to shoppers, but the eyewear the company makes is well-known. Its collections include Oliver Peoples, Ray-Ban, Oakley, and Persol. The company also has licensing deals with Chanel, Coach, and Dolce & Gabbana.
Founded in a New York skateboard shop in 1994, Supreme has captivated skateboarders and hip-hop fans with its clothing, which is also popular among Millennials and Generation Z shoppers. The Carlyle Group acquired half of the company in 2007 for $500 million.
VF Corp. shares jumped nearly 7% in premarket trading. The company said it had “limited synergy” between Supreme and its own brand, making a sale a “natural next step.”
The sale makes sense, according to Neil Saunders, retail analyst at GlobalData, who said CNN said the company had previously “overpaid for valuable assets it wasn’t sure how to develop or maintain,” resulting in losses.
“Buying a streetwear brand at a time when its aesthetic is no longer in demand is a risky move, and it’s unclear what EssilorLuxottica will do to revive Supreme,” Saunders said. He added that the Italian company has “strong distribution capabilities and is good at brand management.”
Observers say the brand’s ubiquity, as well as declining resale values on websites like StockX, have hurt its popularity.
