MILAN – In a surprise move, giant eyewear group EssilorLuxottica said Wednesday it had reached an agreement with VF Corporation to acquire the Supreme brand for $1.5 billion in cash.
“We see an incredible opportunity in bringing an iconic brand like Supreme into our company,” said Francesco Milleri, chairman and CEO of EssilorLuxottica, in a statement with Paul du Saillant, deputy CEO.
“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,” he added.
The transaction is expected to close by the end of the year, subject to customary closing conditions and regulatory approvals.
The Supreme brand runs a digital-first business and operates 17 stores in the U.S., Asia and Europe. The sale of Supreme is expected to be dilutive to VF’s earnings per share in fiscal 2025.
“Under VF, Supreme expanded its presence in the key markets of China and South Korea and has returned to delivering strong growth,” said Bracken Darrell, president and CEO 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. Alongside the other notable brands in EssilorLuxottica’s portfolio, Supreme and its talented team will be well-positioned for continued success,” he added.
As reported in May, financial sources told WWD the luxury streetwear brand was quietly being shopped around to potential buyers and that VF Corp. — which bought Supreme for $2.1 billion in 2020 — was working with Goldman Sachs to review its portfolio at large.
While VF Corp. has been public about its desire to spin off parts of its business, it had not disclosed that it is working with Goldman or that Supreme was one of the brands tagged for sale.
“While we will always look to adjust the VF portfolio from time to time, this transaction gives us increased balance sheet flexibility,” concluded Darrell. “It also supports our overall program to better position the company for long term growth and more normalized debt levels.”
Supreme founder James Jebbia said that EssilorLuxottica is “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.”
J.P. Morgan and Latham and Watkins are serving as exclusive financial and legal advisors to EssilorLuxottica on the transaction, respectively. Goldman Sachs & Co. LLC is serving as lead financial advisor and UBS Investment Bank is serving as financial advisor to VF. Davis Polk & Wardwell LLP is acting as legal advisor to VF.
Established in 2018 by the merger of France’s Essilor and Italy’s Luxottica Group, the company in 2022 reported consolidated revenues of 24.5 billion euros. In addition to its proprietary brands, from Ray-Ban to Oakley and Persol, EssilorLuxottica licensed brands include Michael Kors, Giorgio Armani, Brunello Cucinelli, Burberry, Chanel, Coach, Dolce & Gabbana, Ferrari, Prada, Ralph Lauren, Starck Biotech Paris, Swarovski, Tiffany & Co., Tory Burch and Versace.
Jebbia has had to navigate some choppy waters at VF, where the brand is just part of a much larger picture.
VF, which has annual sales that approach $11 billion, owns the footwear-centric brands Vans, Timberland and Altra, performance apparel brands Smartwool, Icebreaker, outdoor brands The North Face and Napapijri and workwear name Dickies. The company’s backpack business, including Kipling, Eastpak and JanSport, is in the midst of a sale process already.
