Franco-Italian eyewear giant is looking to attract the US's stylish youth market through a deal to buy "iconic brand" Supreme.
ADVERTISEMENTThe Franco-Italian brand is planning to pay $1.5 billion (€1.37 billion) for US "iconic brand" Supreme from owner VF Corporation, which also owns other well-known brands including Vans, The North Face, and Timberland.
Chief executive Francesco Milleri and deputy Paul du Saillant announced the news in a joint statement saying they saw an "incredible opportunity to bring an iconic brand like Supreme" into Essilor Luxottica.
"It perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages, and creativity," the statement said.
Shares in Essilor Luxottica, which fell more than 4% on Wednesday morning, are up around 8.5% over the past year.
A person close to the source said the brand had no plans to expand. However, they said, Supreme's success is considered to offer a unique opportunity for Essilor Luxottica to connect with younger groups worldwide. It was a "great opportunity" to tap "an exclusive community," the company said.
The person went on to explain that: "There are few brands as iconic as Supreme in the world; they have access to a young, tech-savvy, and very hard-to-access community."
Group looking to attract new customers in Asia
They described the transaction as a "no-brainer". Essilor Luxottica hopes the new deal will provide insight into younger consumers in China, Japan, and South Korea.
Well-known brand Supreme debuted in 1994 as an urban fashion and skateboarding label in New York before traveling to Europe and Asia. Since then, the company has run 17 stores globally and a direct-to-consumer online business.
James Jebbia, Supreme's founder, says pairing with Essilor Luxottica provides an excellent opportunity to dedicate focus on the brand and its products.
Many described this deal as surprising and unique, including Bernstein Analyst Luca, who said it is "surprising on two counts: [first] it seems outside of the eyewear 'comfort zone'[and] it appears to be geared towards streetwear, at a time when streetwear brands are seeing significantly lower engagement from consumers worldwide."
Essilor Luxottica, owner of popular brands like Ray Bans and Oakley, emerged in 2017 through a €50 billion partnership between Leonardo Del Vecchio's eyewear group Luxottica and French lens manufacturer Essilor. Today, Essilor Luxottica is known as a leading eyewear manufacturer.
The brand last year released a new and improved version of its audio-video embedded glasses, created through its partnership with Meta while also implementing an Israeli hearing technology start-up brand.
The person close to Essilor Luxottica says the company plans to grow Supreme's eyewear line by releasing Supreme-Meta branching inspired by its Ray-Ban Meta glasses.
The company also plans to buy an 80% stake in Germany's Heidelberg Engineering, a company that specialises in diagnostic solutions and digital surgical technologies for clinical ophthalmology. The Franco-Italian company's expansion through Meta smart eyewear has been another accolade of its growth strategy.
