Supreme, the trendy streetwear clothier adored by celebrities and cool kids alike, has been sold to an eyewear manufacturer for substantially less than it sold for just four years ago.
Italian company EssilorLuxottica announced Wednesday that it’s 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 “perfectly aligns with our innovation and development journey, 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-ever apparel brand acquisition.
The name EssilorLuxottica isn’t well known to shoppers, but the glasses the company makes are. Its collection includes Oliver Peoples, Ray-Ban, Oakley, and Persol. It also has licensing agreements with Chanel, Coach and Dolce & Gabbana.
Founded in a New York skateboard shop in 1994, Supreme has won over skateboarders and hip-hop fans with its apparel, also popular among other Millennial and Generation Z shoppers. The Carlyle Group acquired half the company in 2007 for $500 million.
Shares of VF Corp. soared nearly 7% in premarket trading. The company explained that there were “limited synergies” between Supreme and its own brands, making a sale a “natural next step.”
The sale makes sense, according to Neil Saunders, retail analyst at GlobalData, who told CNN that the company previously “overpaid for a trophy asset which it was not sure how to develop or nurture,” resulting in a loss.
“Buying a streetwear brand at a time when that aesthetic has gone off the boil is risky, and it is not clear what EssilorLuxottica intends to do to revive Supreme’s fortunes,” 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 a decline in its resale value on websites like StockX have hurt its popularity.
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