Can Supreme Stay Cool While Going Corporate?

Once upon a time, just as an underground brand called Supreme began to percolate into the mainstream, a prominent style writer characterized its appeal to The New York Times as “a company that refuses to sell out.”

A closely held secret of skate kids and streetwear aficionados everywhere, it was insider-famous for its Barbara Kruger-esque, tabloid-happy red and white logo, its ability to synthesize all sorts of cultural references in a hoodie and its hotly anticipated random product drops.

That was 2012. In 2014, the company accepted its first private equity investment, from Goode Partners. In 2017, it sold another 50 percent to the Carlyle Group, the P.E. megalith.

And this week it announced that VF Corporation, the owner of 19 brands, including Timberland, Vans and the North Face and with reported 2020 revenues of $10.5 billion, had bought the whole thing. The deal valued Supreme at more than $2.1 billion and completed its path from indie darling to the heart of the establishment.

Sellout complete?

Lauded as a win for VF, whose stock rose 12.5 percent on Monday, the agreement was also seen as a sign of the grown-up status of the streetwear market, now officially recognized by Wall Street.

What exactly it means for Supreme (aside from money) is a more complicated story, though money in a time of pandemic is not to be underestimated.

After all, Supreme’s founder, James Jebbia, also told The Times that the brand “needs to be cool to survive.” And cool and quarterly results don’t really mix.

VF said it was going to leave the brand alone. The leadership, including Mr. Jebbia, would stay in charge; its headquarters would remain in New York.

And certainly, VF has a good track record with its outdoor/workwear brands, which have gone from naff to cool. As with Timberland and Dickies, VF management said, it just wants to support Supreme’s future growth. And speaking of growth, there was so much potential! Only 12 stores, plus one very healthy e-commerce site.

But therein lies the problem.

“Supreme’s ownership chose mass distribution over remaining a veblen good,” Web Smith, the founder of 2PM, a newsletter on media and commerce, tweeted (a Veblen good being a product that increases in desirability even as it increases in price, given its aura of exclusivity).

After all, among other things, Supreme was built on the principle of scarcity. It’s what drove its acolytes crazy. It’s what made them stand in line (or even camp out) for hours to snatch up a limited run of hoodies or a Damien Hirst skate deck or — famously — branded bricks. It drove up the resale value of said items in sometimes astonishing ways (at its price height, the brick was going for $1,000 on eBay); gave birth to private chat rooms and Reddit threads where Supreme-ites shared intel on what was coming when; and why a complete set of 248 Supreme skate decks sold for $800,000 at Sotheby’s in 2019.

It’s part of what made Supreme special in a world where even the most exclusive luxury brands had hundreds of stores, and most chief executives, when asked how big was big enough, would only offer “I’ll know it when I see it.” (And they hadn’t seen it yet.) It’s part of what made Supreme such a desirable partner. In the dating game of stuff, it was hard to get.

It’s also what allowed Supreme to engage in its delicate balancing act of both framing its products as an ironic meta-commentary on the culture of consumption for a generation that wanted to reject those trappings, while also exploiting that culture for its own ends.

Maybe not so much any more. Though the brand was once called “the Chanel of downtown streetwear,” it is worth noting that Chanel is still independent. Now Supreme no longer is.

In his prepared statement, Mr. Jebbia said the deal would allow the brand to maintain its culture and approach, but the one thing Wall Street demands is growth. Either through more products or more stores. As the headline in Footwear News went, “Analysts: The VF, Supreme Marriage Is Going to Be Bigger Than Forecasted.

Where said financial folks get bug-eyed with dollar signs, however, fans may see dilution. And that has a way of eroding mystique.

Perhaps this simply marks the end of the inevitable journey that comes to all great disruptive brands that begin life as outsiders. They subvert the status quo only to pique the interest of the dominant players, who absorb their strategies and then go on to absorb the actual source.

Fashion is great at that. See: sneakers. And all enfants terribles have to grow up or risk becoming caricatures of themselves. See: Jean Paul Gaultier. Perhaps it is natural evolution, the old guard relaxing into a comfortable perch to make way for the next generation. It’s the cycle of brand life!

Besides, Supreme has been flirting with the inside for a while, collaborating promiscuously with companies like Everlast, Louis Vuitton and Meissen. Mr. Jebbia even won a Council of Fashion Designers of America award for men's wear, in 2018. When accepting his award, he said he had never considered himself a designer, yet he showed up and shook hands. He played the game even if he pretended not to. Now he can take his rightful place as the elder statesman of streetwear.

The Supreme myth had already become more mirage than reality. In which case the VF deal, lucrative as it may be, simply exposes a truth that no one had wanted to buy.

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