V.F. Corp (VFC) Surges 13% After Agreeing to Sell Supreme Brand

Core Insights - V.F. Corporation (VFC) has announced the sale of the streetwear brand Supreme to EssilorLuxottica for $1.5 billion, resulting in a 13.6% surge in VFC's shares on July 17 [1] - The sale reflects V.F. Corp's strategic focus and the increasing value of streetwear brands in the market [1] Company Strategy - The decision to sell Supreme indicates that the acquisition, which was expected to enhance V.F. Corp's portfolio, did not meet growth expectations, leading to a write-down of about two-thirds of Supreme's value by 2023 [2][3] - Management's efforts to revive Supreme diverted attention from other major brands like The North Face and Vans, which were already facing challenges [3] - The sale aligns with V.F. Corp's strategy to refine its portfolio for better alignment and operational efficiency [3] Market Reaction - Investors reacted positively to the sale, as evidenced by the significant rise in V.F. Corp shares following the announcement [5] - Over the past three months, V.F. Corp's shares have increased by 25.8%, contrasting with a 4.6% decline in the industry [5] EssilorLuxottica's Perspective - EssilorLuxottica views the acquisition of Supreme as a strategic expansion beyond traditional eyewear offerings, aiming to innovate and connect with new demographics [4]