Assessing VF Corp’s Potential Sale of Supreme

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Assessing VF Corp’s Potential Sale: Over the past year, American conglomerate VF has faced a number of challenges, including a change in leadership, disappointing results from flagship brands, many management shakeups across labels, and the entrance of activist funds into the company’s capital. In February, VF announced a thorough evaluation of its assets and the retirement of its finance director, marking the culmination of this turbulent time.

While less prominent brands such as Altra, Smartwool, Kipling, and Napapijri could have been the focus of this review, Supreme emerged as the center of attention. The premium New York streetwear brand Supreme, which VF acquired from Carlyle for $2.1 billion in 2020 during a prosperous moment for both companies, has faced challenges. However, the COVID-19 outbreak and subsequent disruptions to the textile industry, which were beyond anyone’s control, have impacted Supreme’s economic model. Yet, the brand’s potential for recovery remains strong, given its unique economic model based on partnerships and limited releases.

According to Women’s Wear Daily, a US media publication, VF, which has been headed by Bracken Darrell since last June, allegedly hired investment firm Goldman Sachs to investigate possible purchasers for Supreme as part of the asset assessment. However, there was some cause for optimism in recent remarks made by the company’s financial director, Matthew Puckett, during the most recent quarterly results. Puckett highlighted the brand’s strong performance and growth in every location, with the Korean market standing out as a particularly promising area of expansion. This positive outlook, coupled with strong sales and improved profitability, provides a glimmer of hope for Supreme’s future.

Despite the difficult global backdrop and the substantial write-down of the brand’s book value in the previous fiscal year, Supreme’s globalization efforts, especially in Asia, were reaffirmed in Puckett’s remarks, which provided reassurance. Notable partnerships have been gained by the brand recently, such as a deal with MM6 Maison Margiela, which is anticipated to increase its attractiveness.

The VF Group’s upcoming release of its quarterly and annual financial results on May 22 is a pivotal moment. These results will not only provide a comprehensive overview of VF’s performance but also spark discussions on asset reviews, particularly Supreme’s future. This transparency and open dialogue are crucial for our stakeholders and potential investors to stay informed and involved in VF’s journey.

Ethan Sullivan

Ethan's penchant for the pulse of the fashion world extends to covering lifestyle topics, offering readers a seamless blend of the latest style updates and lifestyle trends.

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