Latin Grammys 2018

What Does Supreme's Billion-Dollar Valuation Mean for Music's Hypebeasts?

Courtesy of Supreme
Gucci Mane in an ad for Supreme.

On Oct. 8, it was announced that Supreme founder James Jebbia had sold a 50% stake in the company to The Carlyle Group, a private equity firm whose portfolio has also included apparel and accessories brands like Moncler, Golden Goose, and Nixon. The $500 million deal was a long-rumoured move for the once-niche Supreme. The streetwear label’s profile has grown substantially over the past half-decade, culminating in an official collaboration with luxury behemoth Louis Vuitton earlier this year. Founded in 1994, Supreme has come to represent a particular strain of insouciant Lower East Side skater cool that has connected globally—in addition to its original Lafayette Street location, where long line-ups to purchase product have become a fixture, Supreme operates stores in L.A., London, Paris, throughout Japan, and, as of last week, a massive 3,000 square foot storefront in Williamsburg, Brooklyn (Mayor Bill de Blasio cut the ribbon).

Supreme's Wearable Mixtape From Sade to Gucci Mane

It built its cred slowly and steadily by producing strictly limited quantities, rarely raising prices, maintaining a consistent brand identity built around its Barbara Kruger-referencing logo, and collaborating with beloved brands, musicians, and artists, both mainstream and obscure. Supreme tends to use its musical taste to advertise its upcoming collections, typically photographing a musician wearing a Supreme logo t-shirt and printing the image on posters that are wheatpasted throughout the city—some recent partners include Nas, Gucci Mane, Neil Young, and Morrissey.

 

♥️ is Supreme ♥️

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So, what does the sale mean for the brand?

It practically guarantees significant expansion. Currently, Supreme is only available in secondary markets throughout most of Asia. While the brand used to wholesale, it began winding down its retail partnerships in the early part of this decade, and is now officially available strictly through its own bricks-and-mortar locations, its online store, and at Dover Street Market, the upscale department store owned by Comme des Garçons—a frequent Supreme collaborator. At present, Supreme’s web shop only ships to the United States and Canada, which leaves a ton of potential revenue on the table. It is likely that this influx of cash will be funneled into logistics allowing worldwide shipping and new stores in Hong Kong, first-tier cities in mainland China, and in South Korea.

 

Ready.

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It also means another significant move can be expected in the near future. A firm like The Carlyle Group does not make an investment like this unless there is an opportunity for a significant return, which likely means another sale—potentially to a luxury conglomerate like LVMH or Kering—or an IPO, in which shares of the company would be made available for purchase to the general public.

The question as to whether Supreme will lose any of its cachet as a result of this deal remains to be answered. Diehard fans of the label have been complaining of overexposure for the better part of a decade, yet demand for the brand continues to grow. As evidenced by the growing trend of musician collaborations with other brands (Fenty Puma, Reebok and Coach, to name a few), Supreme's shared collections are sure to undoubtedly increase exponentially, if not globally. Line-ups for its weekly Thursday morning product releases (Saturdays in Japan) have been par for the course for years, but recently, this practice has extended to normal shopping hours throughout the week. As the world of high fashion becomes increasingly enamored with the streetwear brands it once scoffed at, labels like Supreme are breaching new audiences unfamiliar with the brand’s history.

What’s passé to one person is brand new to another—Sorry haters and hypebeasts', but Supreme has a lot of room to grow before it becomes truly tired.