The Franco-Italian eyewear multinational is investing $1.5 billion in the purchase of the Supreme brand from the American group VF Corp (Vans, Timberland, The North Face). Since its takeover of the streetwear label in 2020, its current owner had failed to rekindle the flame of what was once one of the most desirable brands on the fashion planet.
EssilorLuxottica leaves its comfort zone.
The Franco-Italian specialist in eyewear, and in particular luxury licenses, has just announced the acquisition of the Supreme streetwear brand from the American group VF Corporation. The transaction is expected to close before the end of 2024, subject to regulatory approvals and other customary conditions.
The announced sale price of $1.5 billion shows that the label has lost some of its appeal. The owner of the Vans, Timberland and The North Face brands had itself acquired Supreme in 2020 for $2.1 billion.
Collab’ with Vuitton
Launched in 1994, Supreme had risen to the firmament of the most desirable brands after its 2017 collaboration with Louis Vuitton for its men’s fashion show. Artistic director Kim Jones proposed the trunk-maker’s Keepall red travel bag with the Supreme logo…
Other collaborations (Stone Island, Nike…) followed, maintaining the brand’s buzz and provoking impressive queues in Supreme stores.
But today, the buzz has died down. In the fiscal year ending March 2023, the label posted sales of $523.1 million (versus $561.5 million the previous year). Net profit also fell, from $82.4 million to $64.8 million.
More queues
Another sign of the label’s declining appeal is that the queues outside its points of sale have disappeared…Supreme offers its collections online and in its own network of 17 stores in the United States, Asia and Europe.
According to streetwear media specialist Highsnobiety, “Supreme remains one of the biggest brands on the planet, but it’s nowhere near as culturally powerful as it was five or six years ago, and the decline is tangible”.
Generally speaking, the world of streetwear is no longer as popular as it was a few years ago…
But at EssilorLuxottica, we believe in the label’s appeal. “This acquisition gives us direct access to new audiences, modes of expression and creative approaches. With its unique signature, its direct commercial approach and its own customer experience – a model that we are committed to preserving – Supreme will have its rightful place in our portfolio of own brands, while complementing that of our licensed brands”, said Francesco Milleri and Paul du Saillant, CEO and Deputy CEO of EssilorLuxottica respectively.
A surprising transaction
Nevertheless, EssilorLuxottica’s acquisition of Supreme is surprising, even disconcerting for industry experts.
It’s true that Supreme’s new owner has no shortage of resources.
With over 200,000 employees in 150 countries, 650 operating sites and 18,000 stores, EssilorLuxottica, listed on Euronext Paris, is an undisputed heavyweight in its field, generating consolidated sales of 25.4 billion euros.
In addition to iconic brands such as Ray-Ban and Oakley, it has built up a fine portfolio of licenses for luxury brands such as Chanel, Moncler, Prada, Versace, Tiffany & Co and Michael Kors, recently renewed and Diesel (OTB Group) recently signed…
According to Luca Solca, a luxury goods analyst at Bernstein SG, quoted by Zonebourse, EssilorLuxottica may see a new Oakley in Supreme. He recalls that when the group acquired the brand in 2008, it was present in both eyewear and textiles…
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Featured Photo: © Supreme
