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V.F. Corporation (NYSE:VFC) shares are trading higher after the company announced it entered into a Stock and Asset Purchase Agreement to sell its Supreme brand to EssilorLuxottica (OTC:ESLOF) for $1.5 billion in cash.
Supreme operates a digital-first business and 17 stores across the U.S., Asia, and Europe.
VFC stated that the Supreme brand has grown significantly in China and South Korea; however, a strategic review highlighted limited synergies between Supreme and its integrated model, which led to sale of the brand.
Francesco Milleri, Chairman and Chief Executive Officer and Paul du Saillant, Deputy Chief Executive Officer at EssilorLuxottica, said, “We see an incredible opportunity in bringing an iconic brand like Supreme® into our Company. It perfectly aligns with our innovation and development journey, offering us a direct connection to new audiences, languages and creativity.”
The transaction is expected to close by the end of 2024, pending customary conditions and regulatory approvals. The sale is anticipated to dilute VFC’s earnings per share in FY25.
Bracken Darrell, President and Chief Executive Officer at VF said, “While we will always look to adjust the VF portfolio from time to time, this transaction gives us increased balance sheet flexibility. It also supports our overall program to better position the company for long term growth and more normalized debt levels.”
Price Action: VFC shares are up 7.59% at $15.30 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
