Supreme gets surprising new owner

CNN — New York (CNN) — Supreme, the trendy streetwear brand beloved by celebrities and cool kids alike, has been sold to an eyewear manufacturer for significantly less than it sold for four years ago.

Italian company EssilorLuxottica announced Wednesday that it is buying Supreme for $1.5 billion in cash from VF Corp. (VFC), the parent company of Vans and Dickies, which bought the brand in 2020 for $2.1 billion.

Supreme “fits perfectly with our innovation and development journey, offering us a direct connection to new audiences, languages ​​and creativity,” EssilorLuxottica said in a statement. The company added that the brand will have its “own space” in its portfolio and marks its first-ever acquisition of an apparel brand.

The name EssilorLuxottica isn’t well-known to shoppers, but the eyewear it makes is. Its collection includes Oliver Peoples, Ray-Ban, Oakley and Persol. It also has licensing deals with Chanel, Coach and Dolce & Gabbana.

Founded in 1994 in a New York City skateboard shop, Supreme has won over skateboarders and hip-hop fans with its clothing, which is also popular with Millennial and Generation Z shoppers. The Carlyle Group acquired half of the company in 2007 for $500 million.

Shares of VF Corp. rose nearly 7% in premarket trading. The company said there were “limited synergies” between Supreme and its own brands, making a sale a “natural next step.”

Neil Saunders, retail analyst at GlobalData, said the sale makes sense. He told CNN the company had previously “overpaid for a trophy asset that it wasn’t sure how to develop or nurture,” resulting in a loss.

“Buying a streetwear brand at a time when that aesthetic has disappeared is risky and it’s not clear what EssilorLuxottica plans to do to revive Supreme’s fortunes,” Saunders said, adding that the Italian company “has strong distribution capabilities and is good at brand management.”

According to observers, the brand’s ubiquity and declining resale value on sites like StockX have damaged its popularity.

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