The iconic Supreme® brand represents an incredible opportunity for growth and innovation for both companies
EssilorLuxottica, a global leader in the optical sector, and VF Corporation (NYSE: VFC), a global leader in the apparel, footwear, and lifestyle accessories sector, have announced that they have entered into a definitive agreement for EssilorLuxottica to acquire the Supreme® brand from VF for $1.5 billion in cash.
Francesco Milleri, Chairman and CEO, and Paul du Saillant, Deputy CEO of EssilorLuxottica, commented: “Integrating an iconic brand like Supreme® into our Group represents an incredible opportunity for us. Supreme® perfectly aligns with our path of innovation and growth, offering us a direct connection to new audiences, languages, and creative dimensions. With a unique identity and a business approach and shopping experience entirely consumer-oriented, a business model we wish to preserve, Supreme® will have a prominent position within our portfolio of owned brands, complementing our licensed brands, and will benefit from our Group's experience, expertise, and production network.”
Bracken Darrell, President and CEO of VF, stated: “With VF, Supreme® has strengthened its presence in strategic markets such as China and South Korea and has returned to solid growth. Nevertheless, given the brand's unique business model and VF's integrated model, after a strategic review of our portfolio, we felt that the synergies between Supreme® and VF are limited, making this transaction a natural step. Alongside the other important brands in EssilorLuxottica's portfolio, Supreme® and its talented team will be able to continue their journey successfully.” Darrell continued: “We will continue to periodically evaluate new opportunities to optimize VF's portfolio, but this transaction provides us with greater financial flexibility today, also supporting our broader strategy to better position the company for long-term growth with normalized debt levels.”
James Jebbia, founder of Supreme®, commented: “In EssilorLuxottica, we have found a unique partner who understands that we perform best when we remain true to ourselves, continuing to work and grow as we have done over the past 30 years. This way, we can maintain our focus on the brand, our products, and our customers to strengthen our long-term success.”
The transaction is expected to close by the end of 2024 and is subject to customary market conditions and approval by the relevant regulatory authorities. The Supreme® brand operates through a digital-first business model and has 17 stores across the United States, Asia, and Europe. It is expected that the sale of Supreme® will have a dilutive effect on VF's earnings per share in fiscal year 2025.
J.P. Morgan and Latham & Watkins acted as exclusive financial advisor and legal advisor, respectively, for EssilorLuxottica. Goldman Sachs & Co. LLC acted as lead financial advisor for VF, along with UBS, which served as financial advisor to VF. Davis Polk & Wardwell LLP acted as legal advisor to VF.