The world of fashion and retail has been abuzz with the news of EssilorLuxottica's acquisition of the iconic streetwear brand Supreme. This strategic move by the Italian eyewear giant, known for its prestigious brands such as Ray-Ban, Oakley, and Persol, has sent shockwaves through the industry.
Founded in a New York skateboard shop in 1994, Supreme has become a cultural phenomenon, captivating the hearts and wallets of celebrities, skateboarders, and fashion-forward consumers alike. The brand's unique blend of streetwear aesthetics, limited-edition releases, and collaborations with high-profile partners have earned it a devoted following among Millennial and Generation Z shoppers.
The acquisition, valued at $1.5 billion in cash, represents a significant decrease from the $2.1 billion that VF Corp., the parent company of Vans and Dickies, paid for the brand just four years ago. This disparity in valuation has raised eyebrows, with industry analysts suggesting that the brand's ubiquity and a decline in its resale value on platforms like StockX have contributed to the drop.
EssilorLuxottica, the eyewear conglomerate formed by the merger of Essilor and Luxottica, has positioned this acquisition as a strategic move to align with its innovation and development journey. The company believes that Supreme's direct connection to new audiences, languages and creativity will complement its existing portfolio of premium eyewear brands.
Supreme perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity, the company stated in its announcement.
This acquisition marks EssilorLuxottica's first-ever foray into the apparel industry, a move that industry observers have described as both bold and risky. The company's expertise lies in the eyewear sector, and the transition into the world of streetwear and fashion could present unique challenges.
Neil Saunders, a retail analyst at GlobalData, cautioned that buying a streetwear brand at a time when that aesthetic has gone off the boil is risky, and it is not clear what EssilorLuxottica intends to do to revive Supreme's fortunes. However, he acknowledged that the Italian company has strong distribution capabilities and is good at brand management, which could potentially help in navigating the new terrain.
As the dust settles on this acquisition, the industry will be closely watching to see how EssilorLuxottica leverages Supreme's brand power and cultural cachet to expand its reach and connect with a younger, more diverse consumer base. The success of this venture will not only impact the future of Supreme but also serve as a testament to EssilorLuxottica's ability to diversify its portfolio and adapt to the ever-evolving landscape of the fashion and retail industry.
