EssilorLuxottica has agreed to buy streetwear brand Supreme from VF Corporation for $1.5 billion, both companies announced on Wednesday. This acquisition marks the first time the French-Italian eyewear maker has ventured into the apparel industry.
In a separate statement, EssilorLuxottica revealed it had agreed to purchase an 80% stake in Heidelberg Engineering, a family-owned German company specializing in diagnostic solutions and healthcare IT for clinical ophthalmology. This move strengthens EssilorLuxottica’s push into medical technology. Financial details of this deal were not disclosed.
VF Corp, which owns brands like Vans and The North Face, acquired Supreme in 2020 for $2.1 billion. According to a joint statement, the sale of Supreme is expected to negatively impact VF’s earnings per share in fiscal 2025.
Following the announcement, EssilorLuxottica shares fell 2.5% as of 0720 GMT. A Milan-based trader commented that the acquisition is outside EssilorLuxottica’s core business and comes at a time when streetwear brands are experiencing lower consumer engagement globally.
Bernstein analysts noted in a report, “It appears to be geared towards streetwear, at a time when streetwear brands seem to be seeing significantly lower engagement from consumers worldwide.”
The deal is expected to close by the end of 2024. EssilorLuxottica highlighted that Supreme offers a direct connection to a new audience. “With its unique brand identity, 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,” said EssilorLuxottica’s CEO Francesco Milleri and Deputy CEO Paul du Saillant in a statement.
VF Corp stated that a strategic portfolio review determined limited synergies between Supreme and VF, making the sale a natural next step. “This transaction supports our overall program to better position the company for long-term growth and more normalized debt levels,” said Bracken Darrell, President and CEO of VF, in the statement