Retail in Asia

In Trends

Carlyle group acquires stake in Supreme

Carlyle group acquires stake in Supreme

Supreme confirmed the skate wear brand has sold a 50 percent stake in its business to private equity giant Carlyle for $500 million.

Supreme’s founder James Jebbia spilled the news to US and UK media, saying the July 2017-transacted deal was kept hidden, as the New York designer didn’t want to blemish Supreme’s cult street cred.

SEE ALSO : Golden Goose Deluxe backed by Carlyle fund plans store openings in China, USA

According to Jebbia, the arrival of Carlyle allows Supreme to consolidate growth and brings in more organisational expertise.

The transaction translates into an enterprise value of $1.1 billion for Supreme, including $1 billion in equity and $100 million in debt.

According to sources, the figure is under 10-times Supreme’s projected earnings before interest, taxes, depreciation and amortization of about $100 million.

The investment comes just days after the American label opened a New York retail space, adding to its Paris flagship opened last year.

Supreme currently has another store in Los Angeles, one in London and six stores in Japan.

No other store openings have been confirmed since the investment but more debuts in new Asian markets and expansion in current geographies is likely, experts told WWD.

“China is a huge player that they aren’t currently in. One of the biggest things I noticed is in Japan, they have six or seven stores, it does well, sells out every day, but if you go to Hong Kong, maybe a bigger market than Tokyo you have zero stores there, zero stores in Korea, Mainland China,” Keith Tran, the co-owner of Black Market, a sneaker and streetwear, told WWD.

“They are huge marketplaces for the Supreme customer. If I would guess [the Carlyle investment is] going to help them expand quicker into the Asian markets.”

SEE ALSO : Louis Vuitton x Supreme returns in Japan

Supreme has garnered a strong reputation for exclusive collaborations in recent seasons (think Louis Vuitton and Lacoste), which have generated quite a buzz for the brand.

Founded in 1994, Supreme was spawned by Jebbia during the decade skate fashion epoch.