EssilorLuxottica Acquires Supreme® from VF Corporation for $1.5 Billion

By Tamara Parker • Wednesday, July 17 15:17 • Permanent Link

EssilorLuxottica, a global leader in the optical industry, has announced its acquisition of the Supreme® brand from VF Corporation for $1.5 billion in cash. This acquisition is expected to provide EssilorLuxottica with a direct connection to new audiences, languages, and creativity. The transaction is anticipated to close by the end of CY2024, subject to customary closing conditions and regulatory approvals.

Supreme® was founded in 1994 and has since expanded from its New York City origins into a global community, operating 17 retail stores and an e-commerce platform across all regions. Under VF Corporation, Supreme® expanded its presence in key markets such as China and South Korea and has returned to delivering strong growth. However, VF Corporation determined that there were limited synergies between Supreme® and its integrated model, leading to the decision to sell the brand.

EssilorLuxottica's consolidated revenue for 2023 was reported to be Euro 25.4 billion with over 200,000 employees across 150 countries, 650 operations facilities, and 18,000 stores. The company is home to iconic eyewear brands including Ray-Ban and Oakley, as well as luxury licensed brands and world-class retailers such as LensCrafters and Sunglass Hut.

The acquisition of Supreme® is expected to complement EssilorLuxottica's brand portfolio and provide the brand with the expertise, capabilities, and operating platform of the group. This move is seen as setting up Supreme® for long-term success, as expressed by Supreme® founder James Jebbia, who emphasized the importance of staying true to the brand's identity and continuing to operate and grow as it has for the past 30 years.

The sale of Supreme® is expected to be dilutive to VF Corporation's earnings per share in fiscal 2025. However, the transaction provides VF Corporation with increased balance sheet flexibility and supports its overall program to better position the company for long-term growth and normalized debt levels. The market has reacted to these announcements by moving the company's shares 14.6% to a price of $16.29. For the full picture, make sure to review V.F.'s 8-K report.

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