EssilorLuxottica acquires Supreme from VF Corp

EssilorLuxottica, owner of optical brands including Rayban and Sunglasses Hut, has today entered into a “definitive agreement” with VF Corporation to acquire Supreme for £1.1 billion ($1.5 billion) in cash.

In April 1994, Supreme opened its doors on Lafayette Street in downtown Manhattan and became the home of New York City skate culture. The downtown institution has garnered a cult following thanks to its hype-beast aesthetics, exclusivity and collaborations. In 2017, Supreme collaborated with Louis Vuitton on a capsule collection, which propelled its 'cool' status to new heights. The collection still holds legendary status and is still highly coveted to this day.

Since its inception, the brand has expanded from its New York City origins into a global community, operating 17 retail stores and an e-commerce platform across all regions.

Francesco Milleri, Chairman and Chief Executive Officer and Paul du Saillant, Deputy Chief Executive Officer at EssilorLuxottica said that Supreme "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."

Bracken Darrell, President and Chief Executive Officer at VF, added: "Under VF, Supreme expanded its presence in the key markets of China and South Korea and has returned to delivering strong growth. 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."

"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 normalized debt levels."

The transaction is expected to close by the end of CY2024, subject to customary closing conditions and regulatory approvals.

The sale of Supreme is expected to be dilutive to VF’s earnings per share in fiscal 2025.

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.

Supreme Founder, James Jebbia, concluded: "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.”