Does VF Corporation want to sell Supreme?

According to reports from WWD, VF Corporation is reportedly considering the option to sell Supreme, just four years after the historic acquisition for $2.1 billion. If true, it would signal a lack of confidence in the brand, which, after a good but shaky 2023, has returned to growth but appears to have permanently lost its luster. Speculations suggest that VF Corporation, already owning brands like Vans, Timberland, and The North Face, has a habit of streamlining its portfolio to focus on brands more suited to its strategy. Supreme has faced numerous challenges recently. Since transitioning from Carlyle Group to VF Corporation, Supreme has encountered several supply chain issues, particularly in 2022, an unexpected problem given VF Corporation's solid track record in this area. Additionally, Supreme seems unable to regain the coolness that once defined it: the brand appears to be a "slave" to its own status, which over its thirty-year history has likely set a standard that is too high and difficult to consistently replicate. Furthermore, at the end of August 2023, the former creative director of the brand, Tremaine Emory, resigned from his position citing "systemic racism" within the company structure.

The accusations of systemic racism stemmed from Emory's frustration with how the company leadership handled a planned collaboration between Supreme and African-American artist Arthur Jafa: it was later clarified that the conflict arose after the brand management refused to include graphics depicting a lynching, leading to a broader conflict with Emory. Despite this controversy, Supreme continues to achieve excellent revenue results but faces a serious shift in brand perception. The opening of the new store in Seoul in August garnered impressive results on various metrics, a solid proof point that Supreme's growth strategy may indeed have a bright future. "The brand aims to expand brand access to a greater number of consumers globally," said VF Corporation's CFO to investors. Therefore, VF Corporation's fear would be not knowing how to convey the brand perception, bringing it back to "the old days," the days of long lines outside stores, the days when fans eagerly awaited each weekly drop.