Supreme owner realises heavy loss in sale to EssilorLuxottica
Published: 06:22 17 Jul 2024 EDT
Vans and North Face owner VF Corp (NYSE:VFC, ETR:VFP) has agreed to sell its Supreme streetwear brand to Italo-French sunglasses maker EssilorLuxottica for $1.5 billion.
VF, which also owns brands such as Timberland, Dickies and Eastpak, bought Supreme from its founders for $2.1 billion in 2020.
It put Supreme up for sale following a review of its brand portfolio that found limited synergies.
EssilorLuxottica chief executive Francesco Milleri and deputy Paul du Saillant said they saw an "incredible opportunity to bring an iconic brand like Supreme" into the company, saying it offers "a direct connection to new audiences, languages and creativity".
Once a hot skating brand when launched in the 1990s, Supreme has lost its edge as it expanded into a global 'urban' brand.
Bracken Darrell, CEO at VF, said Supreme has expanded into China and South Korea under VF's ownership and "returned to delivering strong growth".
"However, given the brand’s distinct business model and VF’s integrated model, our strategic portfolio review concluded there are limited synergies between Supreme and VF, making a sale a natural next step."
He added: “While we will always look to adjust the VF portfolio from time to time, this transaction gives us increased balance sheet flexibility. It also supports our overall program to better position the company for long-term growth and more normalized debt levels.”
