Has Supreme reached a ceiling?

VF Corp. hasn’t said much about Supreme’s performance since it acquired the brand for $2.1 billion in 2020. A note at the bottom of its annual report released this week explains why.

The streetwear brand posted revenue of $523.1 million in the year ending March, down 7% from $561.5 million a year earlier. Net income also fell to $64.8 million from $82.4 million.

Declining sales are a bad sign for any brand, but especially one whose owner has such big ambitions. In the late 2010s, Supreme was one of fashion’s most coveted brands, tapped into collaborations with Louis Vuitton, Comme des Garçons and Thom Browne.

Denver-based VF Corp., which also owns Vans, The North Face and other brands, hoped to capitalize on Supreme’s global appeal to younger Millennials and Gen Z consumers, driving the vast majority of the growth of the luxury market, who would queue for hours. outside stores in the US, Japan and Europe on drop days, and compete with robots online to secure their favorite merchandise with the iconic Supreme red box logo. As recently as January 2022, VF Corp. predicted that Supreme would soon hit $600 million in annual sales.

Supreme’s underperformance could be seen as the latest sign that the hype around streetwear has cooled. Many luxury brands and consumers have moved away from logo hoodies, puffer jackets and sneakers in favor of more understated and elevated styles.

Or maybe it’s just that the model who propelled Supreme to streetwear giant status is feeling tired. Relentless drops and big name collabs have lost their novelty factor now that everyone is doing it. Many consumers still want streetwear, they just turn to brands like Jerry Lorenzo’s Fear of God, which dethroned Supreme as the most searched brand on StockX last year. Or Aimé Leon Dore, who, like Supreme, has a must-have store in Manhattan for streetwear fanatics, but pedals a sportier, more prepper aesthetic.

Newer, scrappy brands are also taking market share from bigger streetwear players. In London, there’s Corteiz and Free The Youth from Ghana, closely linked to hip-hop and sports like football and basketball that are the origin of contemporary streetwear. Seventh Stores, also in London, has seen sales skyrocket – as well as interest from retailers like Ssense – thanks to its minimalist, logo-less, elevated take on streetwear staples like hoodies and puffer jackets.

Streetwear was initially born out of countercultures like hip-hop, skateboarding and graffiti in the 1980s and 1990s (James Jebbia founded Supreme in 1994). Brands can risk turning off basic consumers when they join large entities. Consumers naturally gravitate towards new brands that promise cultural cachet without corporate growth targets.

“Most Supreme items don’t sell as quickly anymore,” said London-based vintage streetwear retailer Joel Lyal. “You now have a thousand other brands offering the same thing – young people just want to wear something different.”

In addition, the brand’s entire model was built on rarity. The magic is extinguished when the brand and its clothes become ubiquitous on the streets, when customers pass the store on Thursday (fall day) and see ever-shrinking queues, or can find items available on the brand app any day of the week.

And that’s Supreme’s inherent contradiction: Can a brand born out of the New York skate scene of the 1990s retain its appeal after becoming a global brand with stores on three continents? In other words, is there a limit to the extent of rarity and exclusivity?

Luxury brands have solved this problem by charging higher prices and entering new markets, whether that means opening more stores or launching categories such as homewares and beauty. The bigger brands have a fully fleshed out product pyramid, with ready-to-wear or couture at the top and more accessible handbags and fragrances to appeal to the much wider group of aspirational customers. This allows brands to sell “exclusive” products by the millions, without losing their aura.

Supreme has ambitious expansion plans in China, whose streetwear market is accelerating rapidly and where demand for the brand to enter the market is very high. Over the years, fake Supreme flagships have popped up from Shanghai to Shenzhen, often selling products at a higher price than the brand itself. Retailers like Taobao and Tmall are full of lists of counterfeit Supreme products.

Supreme has other cards to play. Although falling short of VF’s target, Supreme’s revenue far exceeds any other streetwear brand and represents legions of die-hard fans. Its drop day of Thursday may not be as important as it once was, but the legacy is here to command the respect of young streetwear fans once again.

Stüssy, a brand that hit its peak decades ago and had almost completely disappeared from consumers’ minds, has made a successful comeback. There’s no reason Supreme can’t, too.

But if so, it can do so by borrowing a page from luxury brands.



Hugo Boss store front

Hugo Boss raises its sales target for 2025. German fashion house Hugo Boss raised its 2025 sales target on Thursday, betting on strong demand in its markets as it proved immune to falling US consumer sentiment.

H&M reports weaker-than-expected second-quarter sales. H&M said sales measured in local currencies for its March-May quarter were “flat”, compared with the average analyst forecast of a 1% gain, according to a Reuters poll. Net sales rose 6% to 57.6 billion crowns ($5.36 billion). Prospects for a better third quarter after a strong start in June sent shares of the Swedish retailer up 6%.

Asos sales fell 14% in the last quarter as the company prioritized profit. British online fashion retailer Asos reported a 14% drop in quarterly revenue on Thursday, but said its new strategy was starting to work as it returned to profitability, pushing its battered shares higher.

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Nina Christensen, Peter Do, Kiko Kostadinov and Anne Holtrop.

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Condé Nast to launch Vogue Adria in Croatia, Serbia and Slovenia. The edition will also cover some of the other countries that were once part of Yugoslavia in the Western Balkan region, including Bosnia and Herzegovina and Montenegro.

Snap uses an AI chatbot to refine its advertising activity. Snap Inc., the maker of the Snapchat app, is testing ways its popular new AI chatbot can boost the company’s advertising business.

Compiled by Sarah Elson and Joan Kennedy.

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