EssilorLuxottica to acquire Supreme in US$1.5B deal

After acquiring Supreme for US$2.1 billion in 2020 and operating the brand for four years, VF corp. (VFC) has announced the sale of the streetwear giant to Italian eyewear corporation EssilorLuxottica for US$1.5 billion in cash.

“Under VF, Supreme® expanded its presence in the key markets of China and South Korea and has returned to delivering strong growth,” writes Bracken Darrell, President and Chief Executive Officer at VF. “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.

Specialising in exclusive eyewear, there are currently 80 brands in EssilorLuxottica’s portfolio including Oakley, Ray-Ban, and Oliver Peoples. It also has licensing agreements with prestigious brands including Chanel, Ferrari, Tiffany & Co, Moncler, Brunello Cucinelli, and more.

Supreme® Founder James Jebbia weighs in: “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. This move lets us focus on the brand, our products, and our customers, while setting us up for long-term success.”

While Supreme may seem like an outlier, being EssilorLuxottica’s first-ever apparel brand acquisition, one can make a case for the transaction based on Oakley’s continued growth as an all-round lifestyle brand under EssilorLuxottica which has owned the brand since 2007. Following the announcement, shares of VF Corp. soared during premarket trading by nearly 7% as investors approved of simplifying the business. Meanwhile, EssilorLuxottica SA shares fell by more than 4%.

Francesco Milleri, Chairman and Chief Executive Officer and Paul du Saillant, Deputy Chief Executive Officer at EssilorLuxottica remain optimistic saying: “We see an incredible opportunity in bringing an iconic brand like Supreme® into our Company. It perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity. 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. They will be well-positioned to leverage our Group’s expertise, capabilities, and operating platform.”

The transaction is expected to close by the end of CY2024. More in-depth details can be found here.

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