EssilorLuxottica acquires lifestyle brand Supreme in US$1.5 billion deal

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EssilorLuxottica have entered into a definitive agreement to buy the streetwear label Supreme from VF Corp. for US$1.5 billion in cash. Supreme is soon to be one of the many acquisitions of the French-Italian eyewear company, which reportedly includes companies such as Ray-Ban, Oakley, Oliver Peoples and Xiamen Yarui Optical.

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“We see an incredible opportunity in bringing an iconic brand like Supreme into our company. It perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity," said Francesco Milleri, chairman and chief executive officer and Paul du Saillant, deputy chief executive officer at EssilorLuxottica.

"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," they explained.

“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 Supremeand VF, making a sale a natural next step,” added Bracken Darrell, president and chief executive officer at VF in a statement.

“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,” Darrell said.

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

Supreme was founded in New York by James Jebbia in 1994, selling clothes and footwear targeting skateboarding and urban trends. It has previously stood out with partnerships with big names such as Nike, Louis Vuitton and The North Face.

In a statement, Jebia expressed his support for the acquisition, commenting that the move “lets us focus on the brand, our products, and our customers, while setting us up for long-term success.”

Separately, EssilorLuxottica has also signed an agreement to acquire a majority stake of 80% in Heidelberg Engineering, a Germany-based company sepcialising in diagnostic solutions, digital surgical technologies and health-care IT for clinical ophthalmology, it said in a statement.

The agreement will bolster EssilorLuxottica’s presence in the med-tech space, advancing its vision to create a shared care system for eyecare.

Founded in 2018 from the merger of eyewear companies Italy’s Luxottica and France’s Essilor, the eyewear company is a prominent leader in design, manufacture and distribution of ophthalmic lenses, frames and sunglasses.

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