Supreme Streetwear Brand Sold to VF in $2.1 Billion Deal
Parent of Vans and Timberland is buying brand with cult following
Supreme, a streetwear brand with 12 stores and a cult following, is being sold to the parent company of Vans and Timberland in a deal that values the company at $2.1 billion.
Current investors Carlyle Group Inc. CG +3.69% and Goode Partners LLC are selling their stakes to VF Corp. VFC +17.12% , the apparel company said Monday.
Founded in 1994, Supreme is known for its apparel products displaying a red-and-white logo bearing its namesake. The seller of skateboarding T-shirts, hats and sweatshirts has tapped into the zeitgeist of teens seeking hard-to-get looks. Unlike traditional retail chains, which aim to sell as much as possible, the label has relied on product scarcity and word-of-mouth referrals to generate hype around its name.
In 2017, the company sold a roughly 50% stake to private-equity firm Carlyle Group for about $500 million, giving it a valuation of nearly $1 billion.
The Supreme brand could contribute at least $500 million in revenue and 20 cents a share in adjusted earnings in fiscal 2022, VF said. VF said it could pay more over time based on revenue growth and gross margin performance.
James Jebbia, Supreme’s founder, and Supreme’s senior leadership team will continue to manage the brand, VF said. Mr. Jebbia could receive a portion of the purchase price in VF equity over time, the company added. The deal is expected to close by the end of the year.