Essilor Luxottica buys Supreme from VF for 1.5 billion

VF’s long-awaited divestiture of Supreme has become a reality. The US group, owner of a broad portfolio of urban fashion brands, has sealed the sale of Supreme to optics group Essilor Luxottica for $1.5 billion in cash. Under pressure from the market, VF has been looking at its portfolio for months to divest brands. Last May, the group hired Goldman Sachs to review its portfolio and push for the sale of Supreme, which it acquired in 2020 for $2.1bn.

The deal is expected to be completed by the end of 2024, subject to final approval from market regulators. ‘We see an incredible opportunity in bringing an iconic brand like Supreme into our business,’ from a transaction that ‘aligns perfectly with our innovation and development journey, offering us a direct connection to new audiences, languages and creative,’ explained Francesco Milleri, chairman and CEO of Essilor Luxottica, and Paul du Saillant, deputy CEO.

‘With its unique brand identity, direct commercial approach and customer experience, a model we will work to preserve, Supreme will have its own space within our own brand portfolio, while also complementing our licensing portfolio,’ they said, while also noting that, with its integration into Essilor Luxottica, the fashion brand will be “well positioned to leverage” the “expertise, capabilities and operating platform of our Group” as it moves forward.

‘Under VF, Supreme has expanded its presence in key markets in China and South Korea, and has again generated strong growth’, but “however, given the brand’s distinctive business model”, and given VF’s “integrated model, our strategic review of the brand portfolio revealed that there are limited synergies” to be established “between Supreme and VF, making a sale a natural next step”. This balance sheet transaction provides us with greater flexibility’, while “also supporting our strategy to improve the company’s long-term positioning and normalise debt levels”.