‘EssilorLuxottica’s $1.5B Supreme deal a huge gamble’

James Jebbia founded Supreme in SoHo on Lafayette Street in 1994, creating a brand renowned for its clothing, skateboards, and accessories that quickly became must-haves. Supreme gained fame for its limited drops, resulting in long waiting lines and a cult following. Jebbia described Supreme not as a brand but a “space,” positioning it as a catalyst of streetwear culture, with a target demographic of anyone below 25. For over two decades, Supreme was creating cultural capital before the term was even in fashion. Supreme’s “hype” marketing and limited-edition collaborations with high-profile partners like Louis Vuitton solidified its cult status. However, Supreme didn't shy away from controversy, as seen in collaborations with Larry Clark that featured themes of sex, drugs, and skating, or Supreme-branded Oreos achieving ridiculous resale prices. Jebbia crafted a brand that epitomized desirability and became a staple in youth culture, making it highly attractive for collaborations. Recent sentiment around Supreme has been mixed. After VF Corp. acquired the brand, many felt that its rapid expansion diluted its exclusivity and desirability. Overexposure and less impactful collaborations led to a perceived decline in the brand’s unique appeal. In essence, VF seemed to have milked the brand, rapidly expanding it to cash in on its iconic status. Desirability and cultural capital must be earned daily. When highly creative brands that know how to create cravings among young audiences suddenly feel inauthentic and commercial, brand equity can falter fast. EssilorLuxottica’s acquisition of Supreme from VF Corp. for $1.5 billion marks a critical crossroads for the brand. This move represents a significant expansion for the French-Italian eyewear conglomerate, which includes iconic brands like Ray-Ban and Oakley. The acquisition reflects EssilorLuxottica’s ambition to diversify and strengthen its position in the lifestyle and fashion sectors. Success will depend on their ability to recreate the original brand appeal for a new generation, including a significant course correction from the last few years. Industry experts have varying opinions on the acquisition. Some view it as a bold move that could rejuvenate Supreme’s brand by leveraging EssilorLuxottica’s extensive retail and marketing infrastructure. Others are cautious, citing the challenges of maintaining Supreme’s edgy, underground image within a corporate framework known for its mainstream brands. Recommendations for EssilorLuxottica To ensure Supreme’s relevance and success under new ownership, several strategies should be prioritized. First, EssilorLuxottica must revitalize Supreme’s exclusivity through carefully curated limited drops and strategic collaborations. The brand’s allure has always been tied to its scarcity and unique partnerships. By reinstating a sense of rarity and FOMO, Supreme can regain its cult following. However, it must be done authentically, with bold and surprising moves, rather than playing it safe. Strengthening brand storytelling is also essential. Supreme’s rich history and cultural impact provide a solid foundation for authentic narratives that resonate deeply with its audience. EssilorLuxottica should reemphasize Supreme’s roots in skate and street culture, using these stories to connect emotionally with both long-time fans and new customers. The goal is to transition from being a mere space to an inspiration. This approach will enhance the brand’s identity and reinforce its cultural significance. Integrating Supreme with EssilorLuxottica’s other lifestyle brands could create innovative marketing opportunities. Collaborations between Supreme and brands like Ray-Ban or Oakley can introduce product lines that blend fashion with functionality, appealing to a broader audience while staying true to Supreme’s edgy ethos. Such synergies will not only diversify Supreme’s offerings but also amplify its presence in the lifestyle segment. Pitfalls to Avoid There are significant pitfalls that EssilorLuxottica must avoid to protect Supreme’s brand equity. One major risk is overexpansion. The rapid rollout of Supreme’s retail presence under VF Corp. led to a perceived loss of exclusivity, undermining the brand’s appeal. A more controlled, selective expansion strategy is needed to maintain Supreme’s high-end, sought-after image. Additionally, it is crucial to preserve Supreme’s core values. Any corporate interventions must respect the brand’s original unbound, provocative, and creative spirit. Over-corporatization could further alienate Supreme’s customer base, which values its authenticity and rebellious edge. Neglecting Supreme’s core demographics could also be detrimental. The brand’s primary audience consists of youth and streetwear enthusiasts who form the backbone of its market strength. While broadening appeal is necessary for growth, it should not come at the cost of disconnecting from this vital customer base. Supreme is at a pivotal moment full of opportunities and challenges. Revitalizing exclusivity, strengthening brand storytelling, and leveraging strategic synergies in a bold and creative way will be mission-critical. In its best times, Supreme was bold, provocative, and never boring. Managing this challenge successfully will require extreme expertise, fearlessness, emotional storytelling, and precise execution of every element without compromise. Only then will EssilorLuxottica be able to revive Supreme’s cult of cool. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Sign up for his masterclasses at the Jing Academy. Follow him: LinkedIn and Instagram. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily.

‘EssilorLuxottica’s $1.5B Supreme deal a huge gamble’

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Published July 22, 2024

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‘EssilorLuxottica’s $1.5B Supreme deal a huge gamble’