Italian eyewear group EssilorLuxottica has reached a definitive agreement to purchase streetwear juggernaut Supreme for $1.5 billion in cash. The deal, anticipated to close by the end of the year, was secured at a notable discount from the $2.1 billion VF Corp. had paid in 2020.

When VF Corp. initially acquired Supreme, it solidified the brand’s mainstream fashion status. However, it also sparked debates about whether Supreme could scale up while maintaining its counterculture credibility. Recently, the rise of new, innovative streetwear brands has posed challenges.

Additionally, both luxury brands and consumers have moved away from logo-heavy apparel such as hoodies, puffers, and sneakers, which drove Supreme’s popularity in the 2010s. Even the hypebeast community, once eager for weekly product drops, showed signs of fatigue. The once-instant sellouts on the Supreme app now linger for weeks.

Supreme’s revenue dropped to $523.1 million in the year ended March 2023, down from $561.5 million the previous year, with a similar decline in profits. VF Corp did not separate Supreme’s financial details for the year ending March 2024.

In February, VF Corp. flagged Supreme as a potential candidate for offloading during a strategic review of its portfolio. VF chief executive Bracken Darrell stated, “Given the brand’s distinct business model and VF’s integrated model, our strategic portfolio review concluded there are limited synergies between Supreme and VF, making a sale a natural next step.” Stay tuned for further updates on this developing story.