The news Supreme had taken outside investment from mega-investment firm The Carlyle group emerged on Friday (October 6, 2017) and now WWD has followed up with news that the transaction took place in July with Supreme selling a 50 percent stake in its share for $500 million.
While it hasn’t been covered by WWD, we know from our own sources that Supreme had outside investment from Goode Partners. Probably that transaction stayed beneath the radar because it was a relatively small investment.
The transaction gave Supreme an enterprise value of $1.1 billion, including $1 billion in equity and $100 million in debt. That translates into just under 10-times the projected earnings before interest, taxes, depreciation and amortization of about $100 million, according to WWD.
The deal was kept quiet because owner James Jebbia was concerned that selling such a big share of the company would hurt the brand’s street cred. A scan of comments on social media confirm Jebbia’s concern with many Supreme fans opining that the brand’s best days are behind it.
Aaron Levant, the founder of Agenda trade show, doesn’t think the nay-saying matters as long as the brand delivers. “What it means for the brand is one or two posts on a streetwear blog and a long thread of kids making negative comments for two seconds and then they are going to forget about it in a month. As long as the brand continues to create great moments, which they will be able to do with more capital, and follow the same business model and distribution strategy, they will be fine.”