Finally, after much speculation, V.F. Corp. (VFC) is offloading its Supreme brand to EssilorLuxottica. V.F. Corp., a global apparel and footwear company, announced a $1.5 billion deal that has already driven VFC shares nearly 10% higher today.
VFC Offloads Supreme
EssilorLuxottica, renowned for crafting eyeglasses under brands like Ray-Ban and Oakley, contrasts sharply with Supreme, known within skateboarding circles for its distinctive streetwear. Despite this, the deal holds great potential for Supreme; EssilorLuxottica’s expansive presence in 150 countries contrasts with Supreme’s modest 17 stores. Integration into EssilorLuxottica’s portfolio could propel Supreme forward significantly, introducing a fresh brand to the global stage.
Potential Boost for VFC
Shareholders of V.F. Corp. also have reason to celebrate, despite the company’s stock plummeting nearly 79% over the last three years due to underperforming financial results. VFC, which owns major brands like The North Face, Timberland, Dickies, and Vans, has struggled with integrating Supreme into its portfolio effectively. However, with the sale of Supreme to EssilorLuxottica, VFC aims to benefit from a more focused portfolio and improve its financial standing. This strategic move is expected to help VFC manage its debt and reposition itself for growth.
The company anticipates that the Supreme transaction will close by the end of this year.
What Is the Price Target for VFC Stock?
Overall, the Street has a Hold consensus rating on V.F. Corp., alongside an average VFC price target of $11.85. However, analysts’ views on the company could see changes following the Supreme deal.
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