Supreme’s 30th year in business will be defined by a landmark sale to an unexpected buyer.

The New York-based streetwear juggernaut, founded in 1994, was resold by the US apparel group VF Corp. to French-Italian eyewear conglomerate EssilorLuxottica this week for $1.5 billion in cash, a significant markdown from the $2.1 billion VF paid for it in 2020.

The deal gives VF Corp. access to quick cash as it seeks to shore up its balance sheet amid falling sales at its much bigger brands — such as Vans, where sales plunged 26 percent in its most recent fiscal year — and mounting debt. EssilorLuxottica gets to expand from eyewear into new categories and the opportunity to lean into Supreme-branded eyewear that it can sell through its huge distribution network.

Supreme, meanwhile, was on the rebound after a shaky start under the VF umbrella. Its annual revenue grew from $523.1 million to $538 million in its most recent fiscal year, despite the tumultuous exit of creative director Tremaine Emory — fuelled by allegations of “systematic racism” internally at the brand in August 2023. The brand expanded its retail presence greatly under VF. It opened stores in Western capitals like Chicago, Berlin, and Milan while expanding into Korea and China through new flagships in Seoul and Shanghai.

The question is where Supreme goes from here. Like Ralph Lauren, it rose to the top with contemporary Americana, albeit a version that wasn’t fully mainstream. But today, the youth subcultures Supreme stood for no longer feel so niche. Hip-hop is massively commercialised, skateboarding and breakdancing are in the Olympics and even rebellious subcultures like graffiti have been transformed into industries ironically intertwined with corporate advertising.

Supreme itself — no longer a cult skate label but a globally recognised brand — may have outgrown the model of drops and scarcity it was founded on; it could even be constraining the brand as it aims for a new phase of growth.

Maybe it’s time for Supreme to sell out and go mass-market.

What that actually looks like could take different forms. One option would be to go the route of a mainstay like Tommy Hilfiger by widening distribution and expanding into wholesale retailers. It was a move made by one of Supreme’s original contemporaries, the New York skate label Zoo York, after it was acquired by hip-hop entrepreneur Marc Ecko in 2001.

Zoo York was much smaller than Supreme today, but it was a watershed moment for a skate brand to be sold in department stores like Bloomingdale’s and Dilliard’s. When Zoo York’s founder, Eli Morgan Gesner, reflected on taking Zoo York to the mass-market, he said it was because Supreme’s model of slow growth wasn’t proven at the time, while Polo and Tommy Hilfiger’s wholesale approach was.

Yet the eventual decline of Zoo York also serves as a cautionary tale for Supreme. Zoo York grew, but it lost its edge under an owner that prioritised sales over the brand’s identity. Supreme would need to try to do the former without compromising the latter.

There are models for that strategy, too, including from EssilorLuxottica’s own playbook and from the luxury world.

When EssilorLuxottica purchased Ray-Ban from Bausch & Lomb in 1999, Ray-Ban was a heritage American sunglass manufacturer widely recognised within pop culture but struggling to compete against emerging newcomers in the category, such as Oakley. Supreme’s situation today isn’t too different. It defined mainstream streetwear in the 2000s and 2010s but is now challenged by upstarts like Corteiz and preppy young menswear labels like Aime Leon Dore. Much as EssilorLuxottica grew Ray-Ban by repositioning it as a widely available but upscale eyewear brand, it could raise the price of Supreme’s wares while only working with stockists that will merchandise it properly and never sell it below retail.

This magic act of maintaining a sense of exclusivity while selling products by the millions is one the luxury industry has perfected. Companies such as Chanel use their ultra-expensive runway pieces and couture to preserve their elevated image while selling branded fragrances and makeup in every airport around the world. Like Chanel frames, Supreme eyewear could be sold throughout the thousands of stores EssilorLuxottica owns. Yet its core direct-to-consumer clothing business could be tightly controlled. (Many Supreme enthusiasts today suspect that VF Corp. upped the stock of its most coveted pieces, the seasonal box logo T-shirts and hoodies, due to slower sell-out times.)

It could implement higher pricing on its higher-end apparel and limit volumes for its most coveted collaborations through invitation-only drops. Meanwhile, the same way Chanel and Dior sell $50 makeup, Supreme is well-positioned to sell a constant supply of entry-level items such as Nike Air Force 1s and Hanes basics emblazoned with a box logo.

Whether Supreme would be open to these approaches is another matter. Founder James Jebbia seems careful not to make the same mistakes as Supreme’s contemporaries. When Stüssy considered a mass-market route through wholesale, it ultimately pulled back in the mid-2010s to establish its cool factor again. Supreme’s distribution is even tighter than Stüssy’s. Outside the secondhand resale market, Supreme still only sells its merchandise at its flagships, its online store and in-store at select Dover Street Market locations.

Even under corporate ownership, Supreme was able to scale on its own terms, given the freedom to scout skate spots before opening new stores and hire the right local scenesters to run them. After Supreme sold to EssilorLuxottica, Jebbia suggested its approach wouldn’t change, saying in a statement, “In EssilorLuxottica, we have a unique partner that understands that we are at our best when we stay true to the brand and continue to operate and grow as we have for the past 30 years.”

But corporate owners can also become impatient, or find themselves in need of cash when times get tough. Supreme will have to prove it can keep growing with the same business model. If it doesn’t, something may have to change.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

Richemont jewellery sales solid, offsetting drop in China demand. The Cartier owner reported a sales gain of 1 percent at constant currencies to €5.3 billion ($5.8 billion) in its latest quarterly earnings. Jewellery sales, which account for the bulk of its revenue and profit and also include the Van Cleef & Arpels and Buccellati brands, rose 4 percent.

Adidas improves full-year guidance as post-Yeezy recovery continues. Revenue by 11 percent year-over-year in its quarter ending May 2024. Operating profit nearly doubled from the year before. The brand also expects to sell off the remainder of its Yeezy inventory by the end of the year, which is expected to generate an additional €150 million in sales.

Macy’s ends buyout talks with activist investors. The American retailer has effectively closed the door on the take-private offer from real estate firms Arkhouse Management and Brigade Capital. The company’s stock plunged on the news.

Armani and Dior face Italian antitrust probe on labour practices. Financial police and antitrust officials searched the headquarters of Giorgio Armani and Christian Dior Italia, alleging that the two brands may have used supplies from laboratories which employed workers receiving “inadequate” wages.

Swatch shares plunge as profit falls 70 percent on weakness in China. The results underscore the downturn in demand for luxury goods in China as consumers in that key market shun purchases of pricey items. The company also recorded a 14 percent drop in sales for the first six months of the year.

Hugo Boss Plunges after slashing outlook on China and UK demand. The German fashion brand now expects operating profit of around €350 million ($381 million) to €430 million in 2024, down from a previous range of €430 million to €475 million. The shares slid as much as 11 percent on Tuesday.

Adidas and Thom Browne fight in UK court over striped trademarks. The New York designer argues that Adidas is effectively trying to establish a monopoly on the use of stripes on clothes. The two companies have previously faced off in the US, where a jury rejected Adidas’ trademark lawsuit last year, a decision upheld on appeal in May.

US retail sales excluding autos rise by most in three months. Retail purchases rose 0.4 percent last month after an upwardly-revised 0.1 percent advance in May. The data buck a trend in recent months showing a gradual slowdown in consumption growth as Americans feel the pinch of high interest rates and a cooling labour market.

Arsenal partners with Labrum London on its upcoming season’s away kit. Sierra-Leonian-born Foday Dumbuya, who founded the London-based menswear brand in 2014, is the first-ever independent designer to create an on-field kit for a Premier League team.

THE BUSINESS OF BEAUTY

Laneige partners with WNBA team Phoenix Mercury. The brand is set to kick off the partnership at the WNBA All-Star Weekend in Phoenix, Arizona with activations and VIP gifting. The partnership comes at a time when there has been more eyeballs than ever before on women’s hoops and will help Laneige grow sales in the Phoenix region.

Douglas raises sales forecast and divests pharmacy business. The company is predicting growth of 8.5 percent this fiscal year, up 1.5 percent from its previous outlook. The firm, which raised €890 million ($967 million) when it went public in March, also announced telehealth company MYA Health B.V will buy its online pharmacy business, Disapo.

J&J profit and drug sales beat expectations. The company said it would generate operational sales of $89.4 billion in 2024, an increase of 6.4 percent from a year earlier, after its $13.1 billion buyout of the device firm Shockwave Medical.

Rabanne launches a fine fragrance collection. La Collection Rabanne, an eight-piece range of fine fragrances, will hit the market on July 18. The scents will be sold at London’s Selfridges department store, as well as on Rabanne’s e-commerce site.

Sisley to open first London spa. The new Maison Sisley will offer treatments for face, body and hair. Treatments will exclusively use Sisley products, but will also emphasise professional techniques such as facial massage, LED and peels.

PEOPLE

Burberry replaces CEO as high-end push falters. Jonathan Akeroyd is departing after less than two-and-a-half years at the British company, and will be replaced by Joshua Schulman, a former CEO of Michael Kors and Coach. The share price fell more than 10 percent in early London trading.

LVMH names new CEOs for Hublot and TAG Heuer watch brands. Julien Tornare, TAG Heuer’s current chief, has been named CEO of Hublot, the brand known for edgy designs and partnerships with athletes and artists. Antoine Pin, currently general manager of Bulgari Horlogerie, will succeed Tornare as CEO of TAG Heuer.

Ewa Abrams tapped as Kering Americas’ president. Abrams succeeds Laurent Claquin, the French executive who was named chief brand officer at the group level last month. Abrams worked at Tiffany & Co. for 17 years before joining Kering Americas as general counsel in 2018.

Lewis Hamilton named Dior ambassador. The seven-time Formula 1 champion and fashion trendsetter has also worked with Dior men’s artistic director Kim Jones to guest design a collection of clothing and accessories set to launch in October. The new partnership with Hamilton comes as Dior owner LVMH is ramping up marketing linked to Formula 1.

Elis Kiss named Vogue Greece editor-in-chief. Kiss first joined the publication when it relaunched in 2019 as fashion features director. She is succeeding top editor Thaleia Karafyllidou.

MEDIA AND TECHNOLOGY

Meta explores stake in Ray-Ban maker Essilorluxottica. The tech giant is considering a multibillion-euro investment in the eyewear group, according to a Financial Times report. Shares of EssilorLuxottica jumped 6 percent on the report, while Meta stock was up 1 percent in premarket trading.

The Cut will publish a fall print edition. This September, the Vox Media-owned publication, a vertical of New York magazine, will publish its viral essays, fashion coverage and pop culture hot takes in its first standalone issue. Should the edition be well-received, parent company Vox Media plans to continue print versions of The Cut twice a year, timed to fashion week.

Compiled by Yola Mzizi.

MILAN, Italy — Midway through March, Italian police raided a factory complex on a quiet street in a leafy suburb of Milan, 11 kilometres from the city’s via Montenapoleone luxury shopping district.

Inside the factory, they found nearly two dozen workers — several employed under the table — making leather bags and accessories for luxury giant Dior. Safety mechanisms had been removed from machinery to enable faster production, with work beginning early in the morning and continuing late into the night, according to court documents. In one instance, Dior paid the supplier €53 ($58) a piece to assemble a handbag it sold for €2,600, the documents said.

LVMH-owned Dior is just one of more than a dozen fashion companies swept up in the Italian investigation linking luxury brands to sweatshop labour. In April, an Armani Group subsidiary was sanctioned by the Court of Milan for failing to ensure its suppliers met Italian labour standards. Alviero Martini, a smaller brand known for its map-print bags, received similar treatment in January. (The company said its suppliers had illegally hired subcontractors). More actions against fashion companies manufacturing in Italy are expected to follow in the coming months.

The investigation threatens the luxury sector’s most precious asset — brand image — calling into question the veracity of the craftsmanship-soaked marketing narrative luxury players routinely use to bolster the perceived quality of their products, while painting labour exploitation as a mass market problem.

The threat comes at a precarious time for the luxury sector. Not only has the market cooled significantly since the heady days of the post-Covid luxury boom. But punchy price hikes amid reports of declining quality have put pressure on the perceived value of luxury products.

On Wednesday, Italy’s Competition Authority announced it had launched its own probe into whether Armani and Dior had misled consumers about their commitments to ethics, craftsmanship and quality in light of the police investigation.

Armani said it has always had measures in place to minimise the risk of supply chain abuses and that it believes the Competition Authority’s allegations “have no merit.” Dior said the initial investigation’s findings don’t reflect the way it operates and that it has stopped working with the suppliers identified by Italian authorities. “The house of Dior firmly condemns these unworthy acts which contradict its values and the code of conduct signed by these suppliers,” the company said in a statement published this week, adding that it is working to improve its supply chain oversight.

It also contested some of the findings in the case. The manufacturers in question weren’t producing women’s handbags, but partially assembling men’s leather goods, Dior said, describing characterisations of its production costs as “ridiculously low” as “erroneous.” “It should be noted that the profit margin of the house of Dior is entirely in line with that of the luxury industry,” the company said.

A Slow-Brewing Backlash

The sweatshop scandal has sparked a slow-brewing online backlash, fuelled in recent weeks by high-profile coverage in publications like The Financial Times and The Wall Street Journal. But it remains to be seen whether social media outrage will impact sales.

The coming week brings the sector’s first public accounting since the Dior news broke in early June — too late in the quarter for much to show up in the numbers when LVMH reports on Tuesday. Luxury investors are anyway currently far more concerned about the fact that Chinese consumers — long the sector’s biggest growth engine — are not shopping like they used to.

“The bigger picture is one of global demand. Right now that is the big topic,” said Adam Cochrane, an analyst at Deutsche Bank Research. “Given everything that’s going on in China, nobody is focused on this in the investment community.”

Judging by history, that’s a reasonable position to take. Luxury brands have largely managed to sidestep associations with poor labour practices that have dogged fast fashion, painting their high price points as both a function and a guarantee of their commitment to artisanal and ethical manufacturing.

Past scandals in Italy and elsewhere have done little to dent this image, quickly fading from collective consciousness, helped along by public commitments to ethical operations and selective investments upstream.

Bernstein analyst Luca Solca first wrote about the risks in Italy’s supply chains 15 years ago. Back then, luxury was in a similarly precarious position, buffeted by the fallout from the 2008 financial crisis. The sector “cannot afford a faux pas in ethical standards,” Solca wrote at the time, warning such missteps could engulf the sector in “a renewed ‘bonfire of the vanities.’”

Instead, Chinese demand stepped in and luxury entered a growth supercycle. If anything, many of the industry’s biggest players have shifted more towards high-margin mass production, while continuing to market their products as exclusive and artisanally crafted. Manufacturing in Italy burnishes this image, but large volumes of production are outsourced across thousands of small producers that make supply chains difficult to control.

“This practice of contractors and subcontractors is in place for a reason. It’s not by accident, it’s in order to reduce costs,” said Solca.

But could things play out differently this time?

‘Disillusioned with Luxury’

As in 2008, the scrutiny on luxury’s supply chain is not a standalone issue, but one of several pressure points putting cracks in luxury’s marketing facade. Soaring prices for high-end handbags already have critics grumbling vocally on social media about sticker shock amid reports of declining quality. Layer on allegations of labour exploitation and the reputational risks are mounting.

“Are people getting temporarily disillusioned with luxury, or is the illusion getting broken for good?” cult fashion Instagram account Diet Prada asked in a recent post referencing conversations around Dior’s alleged €53 handbag.

If luxury’s marketing mythology is indeed “broken,” the implications for the sector are serious.

“I don’t think there is any customer who buys luxury products who would consider it remotely acceptable that, at the price they’re paying for the products, there’s any chance of labour practices being wrong in the supply chain,” said Deutsche Bank’s Cochrane. “It would be a real fundamental risk… the sort of thing that can really change the direction of a brand unless it’s handled the right way.”

Regulators are also playing a bigger role than they have in the past. The investigation by Italy’s Competition Authority is a rare instance of luxury brands getting drawn into a wide-ranging greenwashing crackdown that has already snared numerous mass market players, including H&M Group, Boohoo and Asos. Though potential penalties ranging from €5,000 to €10 million are relatively small, incoming due diligence regulations could bring much more severe fines in the future.

Fixing the issues would require big investments to consolidate supply chains and bring more manufacturing in house. Alternatively, companies could pay suppliers more and step up monitoring and controls. Both have costs, but luxury brands enjoy sizable margins and could make cuts elsewhere to smooth out the impact of any increases.

Still, a real reckoning may only come if fallout from the scandal starts to show up in the bottom line.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.

Welcome back to Haul of Fame, your must-read beauty roundup for new products, new ideas and the tiniest temptation to ask JD Vance if he’s wearing guyliner. (He is… right?)

Included in today’s issue: Addiction Tokyo, Amika, Coach, Doré, Fendi, Gucci, Lancôme, MakeUp Eraser, Naturium, Olive & June, One/Size, Paula’s Choice, Rare Beauty, Voesh and Minions! Yay Minions!

But first…

In 2019, a new phrase began climbing on Google Trends: “skin barrier.”

Until then, the term — which basically just refers to the top layer of our skin — was a snoozy descriptor usually only heard in the dermatologist’s office. But as TikTok de-fanged scientific terms while widening their reach, that all changed. Sleeper brand CeraVe harnessed its gentle approach to the skin barrier to become a viral sensation. Calm-but-firm skin-fluencers like Hyram Yarbo and Dr. Muneeb got millions of views on TikTok posts explaining its importance. And brands that seemed miles away from the term — like the rave-fuelled Milk Makeup — began using it in their marketing materials.

Today, searches for “skin barrier” are higher than ever before, with nearly a 400 percent spike in just the past two years. You know what term has nearly the same trajectory? “Emotional boundaries.”

Just as “the skin barrier” became a cheat code for TikTok views about beauty, “emotional boundaries’' soared as a social media buzzword about mental health. As “boundaries’' became an online catch-all to define everything from petty annoyances to outright abuse — not to mention fodder for Reddit’s “Am I the A***hole” thread and restraining order requests alike — beauty brands like Dove, Glow Recipe and Lashology have all incorporated the term into their marketing speak. There’s even an “empath shield perfume” from indie brand Sage Goddess to help the wearer “maintain better boundaries.” Really.

As science and psychology become further flattened on social media, here’s my prediction: Boundaries and barriers will be further conflated and thus, further hijacked by brands looking to tap into their customers’ heads. A damaged skin barrier will continue to grow as a symbol of all the things invading our physical space — pollution, extreme heat, crammed aeroplanes, aggressive flirts — and eventually become a stand-in for personal boundaries themselves. Watching the news and feeling like we have so little control — over our bodies, our financial savings, our political future, our planet’s health — we’ll keep clinging to tiny pieces of agency as a way to stay sane. (And to stay well-moisturised, because in most creative industries, looking competent and being competent have never been more inseparable.)

Perhaps we cannot put a barrier up to shield ourselves from toxic fumes or toxic friendships. But investing in a skin cream or a mascara that claims to respect our personal space, and help protect our bodies from disruption? Sure.

What Else Is New

Skincare

On July 16, Paula’s Choice introduced Pro Retinaldehyde Dual-Retinoid Treatment — don’t get dizzy from all the words, it’s just a wrinkle cream. They’re saying it’s better because their retinal absorbs into the skin faster and more effectively than regular retinol, supercharging results.

Body and foot care brand Voesh debuted some fascinating “Gua Sha” Cleansing and Shampoo Bars on July 16. They’re solid soap bars, but shaped like lymphatic massage tools, so you can stimulate the scalp and skin in the shower, without buying anything besides the actual cleanser. By the time it melts down to a stub, you won’t get the massage benefits anymore — but you won’t get the clutter of “one more thing in the shower” either, which feels significant.

In retail news, e.l.f.-owned Naturium rolled into Ulta Beauty on July 16, with 43 products total. Three of them — Barrier Bounce moisturiser, Vitamin Bright eye cream and the new product Glow Getter body oil — are exclusive. Meanwhile, their $19 Vitamin C face wash continues to be the most effective summer cleanser I’ve ever used on sweaty skin. I’m annoyed with how good it is.

Also on the store floor, congrats to Doré, the skincare brand launched by photographer and all-around ace human Garance Doré, for launching in Sephora on July 17. The brand claims a 50 percent revenue growth since 2024, with just over $4 million in raised capital. I like their Botanical Cleansing Water better than Bioderma, even though that was the clear inspiration!

And Naked Sundays hit Ulta Beauty on July 18, with new shades of their CabanaGlow Drops.

Makeup

Rare Beauty’s Soft Touch Setting Powder and Baking Puff Duo — a powder and fuzzy pink applicator — hit Sephora shelves on July 17.

Shopping at Credo instead? LYS Beauty unveiled their Triple Fix Loose Setting Powder there on July 16, with seven shades. I’m a big fan of LYS founder Tisha Thompson because she’s managed to brand her “clean” beauty line with ultra-glam imagery that sometimes borders on camp, instead of the traditional plants-everywhere vibe that’s typical in the category. Her makeup feels like a party instead of an assignment.

Speaking of synthetic puffs, MakeUp Eraser’s new Minions collection dropped July 16, with seven little cartoon sponges. MakeUp Eraser claims they’re better for the planet because you can use them over and over — not nothing, considering all the disposable wipes out there! — and the press release for these guys came with the phrase “mom-hack,” as in, “mom-hack your way to less sticky skin, use these sponges with water on your kids after meals.” Interesting!

Lip liners continue to come in hot. On July 16, Lancôme introduced Lip Idôle Lip Shapers, a range of 12 matte lip pencils that claim waterproof, 8-hour wear.

One/Size launched Oil Sucker, its mattifying primer, on July 16. It promises to rebalance an oily complexion while mattifying, with 12 hours of wear. My favourite part of the product is the instructions: “For best results, allow the product to dry for 3 minutes while remaining expressionless.” Extroverts, the gauntlet has been thrown.

Addiction Tokyo introduced its Lip Balm Glow Tint on July 15. It’s a sheer lip tint available in 9 shades. My favourite is “Date at Opera,” which sounds like an Andrew Lloyd Weber stage direction, but is in fact a deep maroon gloss.

Speaking of gloss, here’s a weird one: On July 18, nail brand Olive & June rolled out a Lip Gloss Mani Collection, a new range of six nail polish shades inspired by the trending makeup product. How is it different from regular shimmery, shiny nail polish? Still unclear, but the shades — especially a slightly lavender hue called Passionfruit Gloss — are very cute.

Hair Care

Amika’s Bit Hit collection of volumising shampoo and conditioner launched on July 16, along with a new Rising Star volumising spray. If you’ve been watching the Dallas Cowboys cheerleader documentary on Netflix — or the women speaking at political rallies for either party — you know that bouncy barrel curls continue to dominate many American mood boards.

Fragrance

Would you like a $540 perfume? Meet Amouage Guidance 46 Extrait, which claims to be “a study in light and shade, fragility and strength, subtlety and ostentatiousness.” (As usual, I want whatever LSD these copywriters are on.) The fragrance claims its formula is 46 percent perfume oils, and says it comes from a “High Perfumery House,” which is an interesting attempt to align scent with high jewellery.

On July 14, Auden Lueur introduced its new candle scent, Maris. They say it’s “a scent that transports you to a cliff’s edge where the ocean meets the sky,” which is great, because after watching the news this week, the edge of a cliff is exactly where I want to be.

Jayson Tatum is the new face of Coach Men’s fragrance. The brand announced the deal on July 16, with a press release that used the word ‘basketball’ exactly zero times. That’s weird, because Mr. Tatum is the star power forward for the Boston Celtics. Anyway, as a Massachusetts native, I have no choice but to stan for this collab.

And Finally

Merit Beauty and Allyson Felix really smashed it with this treadmill beauty tutorial, huh?