Apparel and skateboard brand Supreme has been valued at $1 billion, thus beating its rival Abercrombie & Fitch Co. (NYSE:ANF) which still has a long way to go before reaching the $1 billion valuation.
The streetwear retailer achieved the goal by cultivating a loyal following but the interesting thing is that it managed this with 11 stores only compared to its rival Abercrombie which has 900 stores all over the world. Supreme initially started out with just one store in New York and has gradually evolved to become a huge empire. However, the underground streetwear brand managed to achieve this due to the fact that it recently sold 50 percent of its stake for $500 million.
James Jebbia, the founder of Supreme announced on October 6 that his company sold the stake to private firm Carlyle Group. The terms of the deal were not revealed though the apparel brand received $500 in exchange for the 50 percent stake.
“We’re a growing brand, and to sustain that growth we’ve chosen to work with Carlyle, who has the operational expertise needed to keep us on the steady path we’ve been on since 1994,” stated Jebbia.
The Supreme founder also revealed that working together with Carlyle will allow the brand to focus its strength on its main activities thus making it easier to remain in control of the brand. However, Carlyle is not the first external investor to bet on the brand. Goode Partners, a private equity firm based in New York acquired a minority stake in Supreme in 2014. Goode Partners offered capital to Supreme and this financial support was used in the expansion of its retail network.
Jebbia has built his brand into a highly successful business over the past few years. Supreme has become so popular that it has even earned itself the nickname “the Chanel of streetwear.” The recent sale of 50 percent of its stake does not represent a buyout but rather a partnership with Carlyle.
Abercrombie stock closed the latest trading session on Wednesday at $13.24 after a 1.46 percent gain compared to the value of the stock during the previous close.