By Tamia Ncube
- EssilorLuxottica is set to acquire Supreme for over $1B which is a $600M drop from its previous $2.1B valuation by VF Corporation
- Supreme has been struggling with inventory and low sales up to 7% in 2023
After 30 years in business, Supreme is moving house to EssilorLuxottica (EL.PA -1.61%). This represents a significant transition for the iconic streetwear brand. Although this marks a decrease of $600 million from its previous valuation under VF Corporation’s ownership, it presents an opportunity for renewed growth and innovation. Despite facing declining sales and inventory struggles, Supreme’s enduring cultural impact and global resonance indicate the potential for a successful turnaround.
Why This Matters: In light of Supreme’s 30-year journey from a small skate shop in New York City to a billion-dollar brand, this new phase under EssilorLuxottica’s ownership offers the potential for continued success. Amid a 7% decline in sales in 2023, Supreme’s ability to adapt and evolve will be crucial in solidifying its position as a key player in the ever-evolving streetwear market. The projected growth of the streetwear industry to $265 million by 2032 further emphasizes the enduring demand for streetwear culture, indicating opportunities for Supreme to thrive in the future.
Its collaborations with top-tier brands and artists side-by-side with its strategy of limited releases created an aura of exclusivity and hype that captivated a global audience. Even though it has not been doing well, this acquisition may present new opportunities for cross-branding and tap into new markets given that EssilorLuxottica is an Italian brand. EssilorLuxottica on the other hand can enhance its position in the fashion industry with Supreme giving it a stronger foothold in the streetwear segment. From the look of things, this acquisition is a win-win situation for both sides. Supreme has built a strong brand name and loyalty which EssilorLuxottica stands to benefit from. If it aligns it with contemporary fashion trends, innovative product lines or collaborations and lifestyle preferences, it could elevate its market position.
What’s Next: A bright future seems inevitable for Supreme. Looking ahead, the sale opens a new chapter for Supreme. With new ownership, there’s optimism that the brand can leverage its cultural cachet to make a comeback. The streetwear market’s projected growth highlights its lasting appeal, even as brands face tough times. By embracing innovation and cultural relevance, Supreme is well-positioned to navigate the evolving landscape of the streetwear market and continue making a lasting impact on fashion and culture.
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