VF Corp. has acquired popular streetwear label Supreme.
The Denver-based retail group and the New York-based brand jointly announced that they have signed a definitive merger agreement. As part of the deal, which multiple media outlets reported was worth $2.1 billion, current investors The Carlyle Group and Goode Partners are selling their stakes in Supreme.
“The acquisition of the Supreme brand is further validation of our vision and strategy to further evolve our portfolio of brands to align with the total addressable market opportunities we see driving the apparel and footwear sector,” VF chairman, president and CEO Steve Rendle said in a statement. “The Supreme brand will further accelerate VF’s hyper-digital business model transformation and will be a meaningful driver of VF’s commitment to top quartile total shareholder return and long-term value creation.”
The transaction is expected to be completed late this year, subject to customary closing conditions and regulatory approval. As of 8:30 a.m. ET, VF’s stock surged more than 10% to $77.25.
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Supreme currently sells apparel, accessories and footwear through direct-to-consumer channels, primarily digital. Over the years, it has dropped collaborations with VF’s labels — such as the fall ’20 remix of Vans’ Old Skool Pro and the Half Cab Pro silhouettes, plus last year’s twist on The North Face’s popular Nuptse jacket and pants.
Following the acquisition, founder James Jebbia and the senior leadership team will remain with the brand. “We are proud to join VF,” added Jebbia. “This partnership will maintain our unique culture and independence, while allowing us to grow on the same path we’ve been on since 1994.”
According to VF, Supreme offers a $1 billion global opportunity and complements the “street-inspired” labels in its portfolio, including Vans, The North Face, Timberland and Dickies. It is expected to be modestly accretive to the retail group’s revenues and adjusted earnings per share in the 2021 fiscal year. It is forecasted to contribute at least $500 million of sales and 20 cents of adjusted EPS in fiscal 2022.