The Kicks You Wear, Vol. 365 — Selling low on Supreme 💰
Supreme is on the move. Again.
Gooooood morning, family! Welcome back to the Kicks You Wear. Thanks so much for rocking with me today. I appreciate you giving me a bit of your time.
Did a really cool thing this week! I was a guest on Sports Business Radio with Brian Berger. It was pretty cool! We talked about all things Nike. It was a blast. You can listen to it here.
Alright. Let’s jump in.
On the move again
I hate to say I told you so, but I told you so. Supreme is sold. VF Corp has reportedly sold the company off to EssilorLuxottica.
Background: EssilorLuxottica (which, I’m sorry, it sounds like a Star Trek name) is an eyewear company that owns over 150 brands including many names you know like Oakley, Ray-Bans, Moncler, Ralph Lauren and more.
The news: EssilorLuxottica copped Supreme from VF Corporation for $1.5 billion in cash, according to a statement from the brand earlier this week.
The most discussed hook I’ve seen is how much of a discount compared to its 2020 sale.
VF Corp bought Supreme in 2020 for $2.1 billion from founder James Jebbia, the Carlyle Group and Goode Partners.
If you’re doing the math, that’s about a $600 million difference — a sizeable chunk of change.
Be smart: Before slamming VF Corp for making a bad deal and selling low, let’s take a step back and set the stage.
Remember, VF Corp is in cost-cutting mode as it desperately tries to reduce its debt by $4 billion to $6 billion.
The company is already working on selling some of its brands to reduce that debt. The Supreme sale was an obvious move, and I even called a few months ago.
You can’t think about this sale in a vacuum. It’ll be one of many dominos to fall for VF that the company hopes will get it into a better space financially. Is it a loss? Certainly. But in the grand scheme, it needed to happen.
Especially considering what Supreme looks like these days.
Can we be honest? VF Corp probably overpaid for the company when it purchased Supreme in 2020. Think about where we were then.
We were in the middle of the pandemic with every hyped brand taking advantage of consumers who were overeager to spend with a bit of extra cash in hand.
Supreme had reached its peak. It’s been a while since it was the best-worst-kept-secret of the streetwear scene, but it was beginning to jump the shark while being lauded as a “global phenomenon.”
The brand blew up. But the brand blowing up was the complete antithesis of what it represented — the thing that made it cool in the first place. When Supreme lost that, what did it have left to give? That was the question. Over these last few years, the answer seems to have been not much. We don’t discuss the product as much as we do the behind-the-scenes drama these days.
Let me put it this way. Buying Supreme in 2020 was like buying a shiny, new Hellcat. Yeah, that thing looks nice when you first see it. It has all the bells and whistles, too. All the cool love it and talk about how dope it is.
But the value decreases as soon as you drive it off the lot. And that car note? Yuck. “Why in the world did I make this decision?” you ask yourself weekly as you fill up your $70 gas tank.
That’s Supreme.
The big picture: For most of the last decade, we’ve debated whether this brand is dead. Nine times out of ten, when you’ve got to ask that question, the brand probably is dead.
It certainly isn’t what it used to be. EssilorLuxottica (now it sounds like a supervillain) likely won’t fix that. The best it can do is leverage the name into tricking another generation of folks into thinking it still has the juice it hasn’t had in years.
We’ll see how long that lasts before the brand is up for sale again.
Adidas is climbing the ladder
Things aren’t perfect at Adidas, but the come-up at the three stripes is very real.
What’s happening: The company’s Q2 earnings call revealed its revenue is up by 11 percent year over year on a currency-neutral basis and would’ve jumped up by 16 percent if not for the Yeezy ball-and-chain still holding it back.
Its profit is now projected to be 1 billion euros ($1.1 billion). The company’s shares have rebounded to about where they were in early 2022.
The driving force: It’s been all the retro footy joints we’ve seen over these last few years. The Samba is the big one, but the Gazelle has cooked, too. It’s the Campus 80. It’s the Handball Spezials. All of them.
That low-profile shoe has done work for the brand. Snobette’s
talked about how the shift in aesthetics has favored Adidas in her latest newsletter send.“While my headline implies Adidas’ win is riding on the wave of retro soccer shoes aka terrace shoes, in reality I view it more as a sea change shift into low-profile shoes as fashion shifts away from an athletic-dominated cycle to one that favors less head-to-toe athletic luxury, a look that’s been thus far been described as quiet luxury by some and preppy by others. (Though can we all acknowledge we’re in desperate need of a reporter to come up with a better, modern day description asap??) Other brands like Nike and Puma have already begun to follow in Adidas’ footsteps.”
The big picture: We’re coming up on being two-years removed from the Yeezy split and Adidas seems to have figured out what its foundational pieces will be. It’s needed to do this for years, with or without Yeezy. It’s just a shame that it took things going haywire for this to happen.
Whether these trends last remains to be seen, but kudos to Adidas for picking up on them and riding them out.
New Balance is locked in with the WNBA
The WNBA announced on Tuesday that it has agreed to a new partnership deal with New Balance, establishing the brand as an “official partner” of the burgeoning sports league.
The details: New Balance and the W are locked in now.
The WNBA says New Balance will create “authentic broadcast, digital and retail content” featuring Cameron Brink, who is a New Balance athlete.
Brink was the second pick in last year’s WNBA draft behind Caitlin Clark.
New Balance and the WNBA will also partner to launch grassroots initiatives aimed at youth basketball.
Moving the needle: New Balance has been growing its presence in sports over the last five to six years, but there’s been a gap with women’s sports. This partnership with the WNBA fills that gap a bit.
It’s also a good time to tap in with the W.
Attendance and viewership are up around the league so far this year, according to data released from the league.
The league also reportedly has a new television deal worth $2.2 billion on the table, per The Athletic’s Mike Vorkunov.
You'd best buckle in when you can get a seat on a rocket ship.
Does Salehe x Puma mean the end for Salehe x NB?
Salehe Bembury posted a picture of a Puma jet on Instagram with a sign that said “Top Secret Puma Ideas.”
I guess he’s working with Puma now then.
My take: I’m pretty excited about this. I’ve been rooting for a bit more juice from Puma lately and they’ve given it to us. A Salehe project could be fun.
The other side: Many people have speculated that this means the end of Salehe and New Balance and I can understand why. That might not necessarily be the case, though.
Bembury has worked with other brands while working with New Balance, including as creative director at Crocs.
He’s rarely ever been tied down to a single brand. This is typically how he conducts his business.
Even if he is done with New Balance, I don’t think that’s a bad thing. New, good projects are a good thing for everyone.
Plus, maybe I’ll have better luck buying Salehe Pumas than Salehe NBs. Because, boy, his drops are still trash.
#TheKicksWeWear
First, the homie Matt came through on FIRE with the Union AJKOs. I keep saying this but I’ve GOT to get a pair of these.
The homie Waterloo came through with the Sabrina 2s! These joints look dope on foot, man. Wow.
The home Storm came through with the ALL the heat. She got a monopoly on these Jordan 1s, man.
The homie J Shoes came through with the PSG 4s. I LOVE THESE SO MUCH. I gotta break my pair out soon.
Then the homie Alex sent us home with ALL. THESE. DUNKS. Wow, man. This is what you call juice, folks.
That’s a wrap! Y’all really cooked that, man. Good stuff. Gooooood stuff.
That’s a wrap, folks! Thanks so much for rocking with me this week. Appreciate y’all. And welcome to all the knew subscribers who’ve come over recently! Hope you’re loving the newsletter so far.
As always, feel free to email me at mikedsykes@gmail.com if you’ve got any questions, comments or concerns. Or just hit me here on Substack.
Until next time, folks! Peace and love. Be safe, be easy, be kind. We out.
-Sykes 💯
EssilorLuxottica sounds like a pleasure planet the Guardians of the Galaxy visit on a mission.