EssilorLuxottica, maker of the Ray-Ban eyewear brand, has agreed to acquire the streetwear brand Supreme from VF Corporation for $1.5bn in cash.
Supreme, known for its digital-first business model, operates 17 stores across the US, Asia and Europe.
The brand generated revenues of $520m for the fiscal year 2022 to 2023, according to a Reuters report.
The VF Corporation, which also owns brands such as Vans and North Face, acquired Supreme in 2020 for $2.1bn.
The sale is anticipated to dilute VF's earnings per share in the fiscal year 2025.
The transaction will be finalised by the end of the calendar year 2024.
JP Morgan and Latham and Watkins serve as financial and legal advisers respectively for EssilorLuxottica for the transaction.
The acquisition is not only focused on the brand's prospects but also seeks to access a platform, draw on big data and connect with a younger demographic, primarily Gen Z.
EssilorLuxottica chairman and chief executive officer Francesco Milleri and deputy chief executive officer Paul du Saillant jointly stated: “We see an incredible opportunity in bringing an iconic brand like Supreme into our company. It perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity.
“With its unique brand identity, a 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. They will be well-positioned to leverage our group’s expertise, capabilities and operating platform."
In a separate development, EssilorLuxottica announced an agreement to acquire an 80% stake in Heidelberg Engineering, a German company specialising in ophthalmic diagnostic solutions.
The move supports EssilorLuxottica's entry into medical technology, with Heidelberg Engineering set to continue serving the market under its established brand.
In December 2023, VF Corp eliminated 500 positions as part of its restructuring strategy.
