VF Corporation is ready to rid itself of Supreme, four years after buying arguably the world’s most recognizable streetwear label. That’s where EssilorLuxottica comes in.
VF Corp, an American global apparel and footwear conglomerate that also owns notable labels such as The North Face and Vans, was rumored to be searching for a new buyer for Supreme earlier this year resulting from VF Corp’s slumping revenues and leadership change.
For instance, Bracken Darrell, the new president and CEO of VF Corp, was brought in to bring down its debt. Darrell told investors earlier this year that “Everything is on the table and there are no sacred cows,” possibly a hint that Supreme (and Vans, which Darrell is closely overseeing) was on the chopping block. And, despite recent strong earnings, Supreme hasn’t met the optimistic revenue projections set by VF Corp, seeing Darrell keep to his word by putting the streetwear heavyweight up for sale.
It makes some sense: VF Corp is in a big chunk of debt and Darrell has put several of its brands on the chopping block. What does raise a few eyebrows, however, is the company set to buy Supreme.
In a deal worth $1.5 billion, EssilorLuxottica has entered into a definitive agreement to acquire Supreme from VF Corp, which originally paid over $2.1 billion for the company in 2020.
Even as a global leader in the optical industry, it’s an unexpected move from EssilorLuxottica.
There were some groans from the streetwear diehards when Supreme was sold to VF Corp in 2020: A streetwear label with anti-establishment messaging further entering the corporate world didn’t sit well with some. However, the company’s portfolio did include fashion labels that Supreme regularly collaborates with, like The North Face and Timberland, making the partnership easier to justify, something Supreme founder James Jebbia was quick to assert in a statement at the time.
Supreme’s new owner, EssilorLuxottica, does not have a similar background in fashion to that of VF Corp. The Italian conglomerate has, until now, primarily specialized in eyewear and owns companies like Ray-Ban, Oakley, and Barberini. EssilorLuxottica also operates the eyewear license for luxury titans like Prada, Miu Miu, and Burberry.
“We see an incredible opportunity in bringing an iconic brand like Supreme into our Company. It perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages, and creativity,” Francesco Milleri and Paul du Saillant, the chairman and CEO and the deputy chief executive officer at EssilorLuxottica, respectively, commented in a statement announcing the Supreme acquisition.
The duo also mentioned that EssilorLuxottica, created in a 2017 merger between Essilor and Luxottica, aims to preserve the Supreme’s identity and fully direct commercial approach, meaning that, like VF Corp before, it does not plan to meddle in Supreme’s activity.
“In EssilorLuxottica, we have a unique partner that understands that we are at our best when we stay true to the brand and continue to operate and grow as we have for the past 30 years,” commented Supreme founder James Jebbia.
“This move lets us focus on the brand, our products, and our customers, while setting us up for long-term success.”
There has been ongoing discussion about Supreme’s flagging cultural relevance, prompted by a lack of sell-out product and a rapid expansion to new regions like China and Korea that has seen Supreme open almost as many new stores in the past 4 years as in the previous two decades.
EssilorLuxottica’s uphill battle begins, likely with the high-profile assignment of a new creative director, something Supreme has lacked since Tremaine Emory’s much-publicized departure about one year ago.