EssilorLuxottica and VF Corporation have announced a definitive agreement for the luxury eyewear manufacturer to acquire the Supreme brand from VF in a USD1.5 billion cash transaction.
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In February EssilorLuxottica reported a 3.7 percent increase in fiscal 2023 revenue, reaching EUR25.4 billion, while gross profit for the year rose by 3.1 percent to EUR16.1 billion.
Meanwhile, Supreme missed revenue estimates in 2023 with sliding interest for streetwear. News of a potential sale first broke in May 2024, with VF in the midst of a portfolio review.
The brand has established a strong presence with a digital-first business model and a network of 17 stores across the United States, Asia, and Europe. The acquisition is projected to have a dilutive impact on VF’s earnings per share in fiscal 2025.
Leadership at EssilorLuxottica expressed confidence in the acquisition: “We see an incredible opportunity in bringing an iconic brand like Supreme into our company,” said Francesco Milleri, chairman and CEO, and Paul du Saillant, deputy CEO at EssilorLuxottica, in a shared statement.
“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.”
Bracken Darrell, president and CEO at VF, noted Supreme’s expansion in “key markets” such as China and South Korea under the company’s purview. “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,” Darrell said.
“While we will always look to adjust the VF portfolio from time to time, this transaction gives us increased balance sheet flexibility. It also supports our overall program to better position the company for long term growth and more normalised debt levels,” Darrell continued.
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The founder of Supreme, James Jebbia, said: “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.”
The transaction is expected to be completed by the end of CY2024, subject to customary closing conditions and regulatory approvals.