Supreme Gets a Surprise New Owner

New York
CNN
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top superThe trendy clothing brand beloved by celebrities and cool kids alike has been sold to an eyewear manufacturer for a much lower price than it was sold for just four years ago.

Italian company EssilorLuxottica announced Wednesday that it has bought Supreme for $1.5 billion in cash from VF Corp. (In FC), the parent company of Vans and Dickies, which purchased the brand for $2.1 billion in 2020.

Supreme “aligns perfectly with our journey of innovation and development, providing us with a direct connection to new audiences, languages ​​and creativity,” EssilorLuxottica said in a statement. The brand will get its own “space” in its portfolio and represents its first-ever acquisition of an apparel brand.

the name Essilorluxotica Shoppers don’t know this company well, but the eyewear it makes is well-known. Its collection includes Oliver Peoples, Ray-Ban, Oakley, and Persol. It also has licensing deals with Chanel, Coach, and Dolce & Gabbana.

Founded in a New York City skateboard shop in 1994, Supreme has won the hearts of skateboarders and hip-hop fans with its Her clothesIt is also very popular among millennial and Gen Z shoppers. The Carlyle Group acquired half of the company in 2007 for $500 million.

Shares of VF Corp. rose about 7% in premarket trading. The company said there “Limited synergies” between Supreme and its own brands make the sale a “natural next step.”

The sale makes sense, says Neil Saunders, retail analyst at GlobalData. CNN reported that the company “previously overpaid for valuable assets that it was not sure how to develop or care for,” leading to losses.

“Buying a streetwear brand at a time when that aesthetic has become unpopular is risky, and it’s unclear what EssilorLuxottica intends to do to revive Supreme’s fortunes,” Saunders said. The Italian company has “strong distribution capabilities and is good at brand management.”

Observers Brand awareness has decreased, as well. decrease in resale value Sites like StockX have hurt its popularity.