VF Corp.’s first quarter earnings call included news of a $313 million impairment charge (a reduction in value of an asset) on Supreme because of “uneven” performance in 2023 and plans for “more modest growth” in 2024. While VF Corp. didn’t break out Supreme’s revenue, it was described as having improved compared with third quarter revenue.
Commenting on plans to accelerate growth in 2025, CFO Matt Puckett said Supreme would benefit from “geographic expansion,” with the pace of growth planned to accelerate starting in the fall. Puckett noted, “We remain confident in the brand’s long-term growth potential, which will benefit from increasing access to the brand through both geographic expansion and further penetration in current markets, along with product category extension opportunities with current consumers.”
Providing additional details on growth goals for Supreme, which VF Corp. purchased for $1.2 billion in 2020, interim CEO Benno Dorer said the company plans to “increase global access to the brand from today 20 percent of global consumers to 40 percent in three years.”
Dorer described three pillars for growth at Supreme: grow brand awareness; second, expand into new categories, including footwear; and expand geographically with a focus on Asia through additional door openings.
Supreme made its debut in China at Dover Street Market in Beijing in November 2022. According to Dorer, plans for additional expansion in the region were impeded by lockdowns in the region throughout 2022. Dorer went on to describe Japan as “our best market” and “growing strongly.”
At the time it acquired the streetwear giant, VF Corp. reported Supreme had generated revenues of $500 million over the year prior with gross margins of over 60 percent. The company anticipated Supreme’s sales would grow 8-10 percent over the next five years through expanded direct-to-consumer and global sales.