What Does Supreme’s $2.1 Billion Sale Mean For The Brand?
On Monday, in a flurry of press releases and tweets, it was announced that VF Corp was buying Supreme for $2.1 billion. VF Corp is no stranger to hype brands, having bought Vans, The North Face and Timberland in the past. However, Supreme is very much different to those brands, having been iconic across the world for leading to thousands of fakes, and countless resales for almost 20 years.
So what will this mean for the brand? Many, including us, took to Twitter to joke that this will spell the end for Supreme’s coolness and that you’ll be more likely to find it on the high street than on Grailed.
That may not be true. Although VF Corp is a big scary company with a big scary amount of money, it knows how to work its brands. An example would be Vans, who were bought out by VF Corp in 2004, and yet despite being sold on every high street, it still holds a core appeal, even 16 years later. Similarly, the same can be said for The North Face or Dickies, which have seen massive resurgences in the past decade.
Another reason as to why this acquisition makes sense is the continuous collaborations between Supreme and VF Corp-owned brands. There are a number of collaborations every year between Supreme and Vans, The North Face and Timberland. If VF Corp can capitalise on that, then serious money is there to be made.
When asked why they purchased Supreme, Scott Roe; VF Corp’s Chief Financial Officer replied that ‘Supreme generated more than $500 million in revenue over the past 12 months, and the brand has more than doubled over the past four years.” These are big numbers, and it cements streetwear as a serious investment for major companies looking to build their portfolios.
Although there weren’t many details as to how exactly VF Corp would change Supreme, one of the potential avenues being explored is footwear. However, VF Corp understands the fickle nature of Supreme’s consumer base and is no hurry to radically change the brand. Steve Rendle; VF Corp’s Chairman, President and CEO added that “we will take our time to get to know each other” and “there’ll be no rush to really drive to these points”.
So overall, what will happen? In the short, probably not very much, with the brand continuing to operate as normal, until at least 2021. It’s important to note that Supreme founder James Jebbia and his team will still act as the brains of the operation, so the core principles of Supreme are likely to stay intact. In the future, an increase in their brick and mortar stores seem most likely, with a focus on increasing their customer base. How far they will go to achieve that though, is anyone’s guess. Either way, don’t burn your bogos quite yet.
What do you guys make of this? Is this the end of Supreme or just the beginning?