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EssilorLuxottica will acquire Supreme for $1.5 billion
A summer twist that will keep us talking in the coming seasons
July 17th, 2024
Summer is usually a dead period for fashion news, but not this summer. Today, like a bolt from the blue, the global luxury eyewear giant EssilorLuxottica announced its agreement with VF Corporation to acquire Supreme for $1.5 billion in cash. A strategic move that not only represents a significant addition to EssilorLuxottica's vast portfolio of brands but also marks their entry into the apparel business. The company's chairman and CEO, Francesco Milleri, spoke about the synergy between Supreme's identity and EssilorLuxottica's innovation-oriented approach, also mentioning that the brand's commercial model aligns with their company's vision. The idea is to leverage EssilorLuxottica's experience, capabilities, and operational platform to boost Supreme's business, presumably managing it more like a standalone premium fashion brand, taking advantage of a different market position compared to VF Corporation, which specializes in highly distributed brands like Vans and The North Face.
The acquisition is expected to be finalized by the end of the year, as it still needs to follow the usual bureaucratic process for closing the deal and obtaining regulatory approvals. The reason VF Corporation wants to sell Supreme is, in short, that within the scope of the company's strategic portfolio review (which also includes the sale of the backpack business with brands like EastPak, Kipling, and JanSport), it emerged that the synergies between Supreme's business model and VF's integrated operations were quite limited. It is likely a matter of operating costs combined with the fact that Supreme's seasonal collections and drop model do not fit well with VF's favored mass distribution. Bracken Darrell, CEO and president of VF Corporation, also said that the sale would improve the group's balance sheet flexibility, supporting long-term growth and normalizing debt levels. James Jebbia, founder of Supreme, welcomed the acquisition, emphasizing the importance of staying true to the brand's ethos, which is now expected to be repositioned higher in the market. The question remains as to how EssilorLuxottica will actually manage the brand and, above all, whether they will attempt to appoint a creative director to succeed Tremaine Emory, who left the brand after a creative divergence that led him to accuse the brand of racism.