VF offloads Supreme to EssilorLuxottica for $1.5bn

Supreme, founded in 1994 by James Jebbia, is a digital-first brand but has 17 physical stores across the US, Europe and Asia, having expanded into key markets like China and South Korea in recent years.

However, Supreme operates a different business model than VF's 12 other core brands, given its focus on frequent, weekly and limited product drops through the direct-to-consumer channel.

This model presents "unique risks", according to VF's most recent annual report published in May, given the brand's different product volume requirements and harder-to-predict seasonality.

"VF's failure to make the necessary adaptations to its operations to address these different characteristics, complexities and market dynamics could adversely affect VF's revenue, business condition and results of operations," the company said at the time.

On Wednesday, VF's chief executive Bracken Darrell said that, after delivering strong growth since the 2020 takeover, there are now "limited synergies" with Supreme and the rest of the group, "making a sale a natural next step".

Meanwhile, EssilorLuxottica's boss Francesco Milleri said 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," Milleri said in a statement.