Key Takeaways
- VF Corporation sold its Supreme streetwear brand to French eyeglass retailer EssilorLuxottica for $1.5 billion.
- VF CEO Bracken Darrell said the company’s strategic portfolio review determined that selling Supreme was logical.
- The parent of Vans and North Face brands has been attempting a turnaround as it faced falling demand and too much inventory.
VF Corporation (VFC) shares soared Wednesday after the struggling clothing retailer announced that Paris-based retailer EssilorLuxottica purchased its Supreme streetwear brand for $1.5 billion in cash.
VF’s chief executive officer, Bracken Darrell, said that because of Supreme’s “distinct business model and VF’s integrated model, our strategic portfolio review concluded there are limited synergies” between the two. He called the decision to sell the unit “logical.”
Bracken has been leading turnaround efforts for the company behind Vans and North Face, cutting inventory and “rebuilding the leadership team” as demand sank. VF posted a surprising quarterly loss in May, with sales tumbling 13%.
For Ray-Ban and Oakley parent EssilorLuxottica, the move expands its portfolio beyond eyewear. CEO Francesco Milleri, and Deputy CEO Paul du Saillant said that adding Supreme “perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity.”
The transaction is expected to be completed by the end of the year.
TradingView
VF shares rose 14% to close Wednesday’s session at $16.15. Despite today’s advance, shares of VF shares are down about 13% year-to-date.