VF sells Supreme for $1.5 billion to parent company of LensCrafters, Sunglass Hut
The trendy streetwear brand Supreme is getting a new owner — again.
EssilorLuxottica, the optical giant whose portfolio includes LensCrafters and Sunglass Hut as well as Oliver Peoples, Ray-Ban, Oakley and other eyewear brands, has agreed to acquire Supreme from VF Corp. for $1.5 billion in cash. VF, the parent company of Timberland, The North Face, Vans and Dickies, acquired Supreme in late 2020 for $2.1 billion from the Carlyle Group and New York-based private equity firm Goode Partners.
“It [Supreme] perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity,” said Francesco Milleri, chairman and CEO, and Paul du Saillant, deputy CEO, EssilorLuxottica. “With its unique brand identity, fully-direct commercial approach and customer experience — a model we will work to preserve — Supreme will have its own space within our house brand portfolio and complement our licensed portfolio as well.”
In February, VF said it had initiated an in-depth strategic review of its portfolio “to ensure the company owns the brands that it believes create the greatest long-term value.”
[READ MORE: North Face parent company reviewing brand portfolio as Q3 sales fall]
In a statement, Bracken Darrell, CEO and president of VF, said that, under VF, Supreme expanded its presence in the key markets of China and South Korea and has 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. “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.”
Supreme was founded in 1994 as a skatewear brand with a store in downtown Manhattan. It has since evolved into a global business that sells apparel, accessories and footwear under its namesake brand through direct-to-consumer channels that include its 17 retail stores and an e-commerce platform across all regions.
“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,” stated 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.”
The transaction is expected to close by the end of 2024. The sale is expected to be dilutive to VF’s earnings per share in fiscal 2025.
J.P. Morgan and Latham and Watkins are serving as exclusive financial and legal advisors to EssilorLuxottica on the transaction, respectively. Goldman Sachs & Co. LLC is serving as lead financial advisor and UBS Investment Bank is serving as financial advisor to VF. Davis Polk & Wardwell LLP is acting as legal advisor to VF.
