Supreme's New Owner Changes Nothing — Yet
On July 17, streetwear giant Supreme was sold to EssilorLuxottica for $1.5 billion (in cash, no less). This is $6 million less than what previous owner VF Corporation paid for Supreme paid in 2020.
This discount alone is ripe for interrogation. But the new owner quite literally changes nothing for Supreme — for now.
In a press release published the day that EssilorLuxottica purchased Supreme, Francesco Milleri and Paul du Saillant, EssilorLuxottica's respective Chairman/CEO and Deputy CEO, affirmed that they would "work to preserve" Supreme's "unique brand identity, fully-direct commercial approach and customer experience."
A hands-off approach to management, in other words, likely a wise approach to managing eyewear conglomerate EssilorLuxxotica's first apparel company.
This means business as usual for Supreme... for better or worse.
As I have myself noted several times over the past year, Supreme's cultural cache has slipped even amidst the pioneering skate brand's aggressive expansion. In the past four years, for instance, Supreme has opened nearly as many new stores as it did in its first two decades.
Despite this international push, though, Supreme's products aren't selling out like they once did.
That isn't necessarily a bad sign, though and I'd argue that Supreme's clothes are as strong as ever, with high-power collabs anchored by reliably wearable (and quite cool) seasonal collections. And it may merely be manufacturing more products to meet expanded demand, though this is not ideal within an industry dependent on exclusivity.
Indeed, material goods are only part of the equation for streetwear success: Supreme's all-important reserves of cultural cache and actual cash have stagnated.
Supreme has consistently brought in a half-billion bucks in revenue each year, for instance. Solid cash for a clothing company, sure, but peanuts to money-conscious investors who expected Supreme's worth — which VF Corp set at over $2 billion, remember — to multiply year-on-year under VF Corp's direction. Meanwhile, younger, savvier labels are eating into Supreme's clout. The New York brand has become too big, too establishment, to retain its relevance and its appeal within the niche it once dominated.
This downward trend is reflected in the discounted price that EssilorLuxottica paid for Supreme, even inspiring a pessimistic note from a third-party financial expert.
"[The acquisition] appears to be geared towards streetwear, at a time when streetwear brands seem to be seeing significant lower engagement from consumers worldwide," an analyst at wealth management firm Bernstein said in response to Supreme's latest acquisition, per Reuters.
Now, investment firms may know their way around cash but not so much youth culture, so allow me to provide a counterpoint.
I don't think that streetwear brands are "seeing significant lower engagement" across the globe as much as this trend is affecting larger and more corporate streetwear brands.
They're all continuing to make money but they're not growing as swiftly and as substantially as the investor class would prefer, and certainly not as much as the younger labels that have so much more ground to gain. A good recipe for consistency, bad news for expectations of constant increase.
As such, you can read in the Supreme saga a cautionary tale about scaling streetwear brands.
That is, though VF Corp promised a similar hands-off sentiment when it acquired Supreme — “This is a beautiful, simple machine and we don’t want to mess it up, frankly,” former CEO Steve Rendle enthused at the time — It may not have followed through.
Not hard to imagine that VF Corp pushed Supreme towards sudden rapid growth, for instance, considering Supreme's once-lean operation. New CEO Bracken Darrell also appeared to imply this sort of thumb-on-scale approach in a 2024 interview: "We made some missteps in the beginning with Supreme. When they run it independently, they're fantastic."
However, Supreme is not being run independently. It can't be. It's been overseen by multibillion-dollar conglomerates since the Carlyle Group plunged $500 million into Supreme in 2017.
But if EssilorLuxottica gave Supreme the freedom to do its own thing, there'd be room for necessary changes like slowing the expansion, bringing on a new creative director (the role presumably remains vacant since Tremaine Emory's public departure) and perhaps even taking a moment to retract and give Supreme's visual language an overdue overhaul — hey, it worked for Stüssy and Aimé Leon Dore.
EssilorLuxottica has investors to answer to, however, and thus Supreme does, too, so it's not as simple as patiently waiting for the golden goose to lay its eggs. Or is it? Because what happens next may decide the fate of streetwear's most visible brand. A little change could go a long way.
