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21st Century Business Herald reporter Gao Jianghong and interns Tao Chang and Zhang Yizhen report from Beijing

On July 17, Ray-Ban's parent company, Italian eyewear giant EssilorLuxottica, announced that it would acquire American fashion brand Supreme from Vans' parent company VF Group for US$1.5 billion (approximately RMB 10.8 billion).

andComparing the two transaction prices, Supreme's value has shrunk by US$600 million in just four years.

In 2020, as soon as the news of VF Group's high-priced acquisition of Supreme came out, VF Group's stock price rose by 11%, and also aroused a lot of discussion among consumers.

This transaction not only marks Supreme as the 20th brand under VF Group, but also breaks VF Group's acquisition record that has been maintained for nearly 13 years - in 2011, it acquired Timberland for US$2.3 billion.

But four years later, VF Group does not seem satisfied with the deal and has publicly stated that the acquisition of Supreme for US$2.1 billion was too expensive.

In terms of performance, Supreme's revenue fell from $561 million in fiscal 2022 to $523 million in fiscal 2023, and its net profit also fell from $82.4 million in fiscal 2022 to $64.8 million. In 2022 alone, Supreme's asset impairment losses to VF Group amounted to $735 million.

However, the performance of VF Group's other brands was also unsatisfactory.

In the three months to March 30, the group's revenue fell 13% to $2.37 billion, missing analysts' expectations of $2.41 billion, and it suffered a loss of $420 million.

By brand, The North Face's revenue fell 5% to US$810 million, Vans' revenue fell 26% to US$630 million, Timberland's revenue fell 14% to US$340 million, Dickies' revenue fell 15% to US$160 million, and other brands' revenue fell 3% to US$420 million.

The group expects sales to fall further this year, with full-year revenue expected to fall 10% to $10.5 billion in 2024.Choosing to get rid of the burden of Supreme at this time is also VF Group's way of "cutting off the tail to survive."

As a luxury goods group whose main product is glasses, EssilorLuxottica's acquisition of Supreme is indeed unexpected.

In the acquisition statement, the group's CEO Francesco Milleri said that Supreme will be a creative and iconic presence in the group. It will have its own unique position and will be able to complement the group's existing licensed brand matrix.

According to the performance data of EssilorLuxottica Group in fiscal year 2023, its full-year sales revenue increased by 7.1% year-on-year to 25.395 billion euros at a fixed exchange rate, and its adjusted operating profit margin reached 16.5%. Driven by the Chinese and Brazilian markets, sales revenue in the fourth quarter of fiscal year 2023 also increased significantly by 2.4% year-on-year to 6.25 billion euros, which also marks that the growth rate of EssilorLuxottica Group's performance has exceeded 7% for three consecutive years.

In the financial report, EssilorLuxottica Group stated that it continued to promote product diversification in fiscal 2023, such as Stellest in the optical glasses field and Ray-Ban Meta in the wearable devices field, as well as popular brands such as Moncler and Jimmy Choo.

In addition, EssilorLuxottica has also become a pioneer in artificial intelligence this year, promoting the cooperation with the Polytechnic University of Milan to launch the Smart Glasses Lab project, and also launched the Varilux progressive lens Varilux XR series, which is also the first eye-sensing progressive lens.

After being acquired by EssilorLuxottica, Supreme may focus on eyewear sales.