Supreme is indeed eyeed by private equity funds! Biography: Carlyle Fund (Investor of Golden Goose) soon

On October 5th, the New York street tide brand Supreme opened its new store at 152 Grand Street in Brooklyn, followed by a big news: the American private equity giant The Carlyle Group It will invest in Supreme. Sources said that the two parties are about to reach an agreement on this transaction. The specific amount and terms have not been disclosed.

Founded by James Jebbia in 1978, Supreme has become the fastest growing trend brand in the world. Supreme re-writes the retail rules. Its products are highly sought after by fashionistas. The limited-edition series are sold out as soon as they are released. With Carlyle’s stake, Supreme will receive stronger financial support in the increasingly competitive street fashion arena.

In the context of the sluggish overall retail environment, most retailers are facing distressed sales and reduced passenger flow, but Supreme is facing a completely different challenge-how to deal with the shopper crowd in Manhattan stores.

To this end, Supreme has launched a new publishing system: customers no longer need to wait outside the store to wait in line, just register their names on the waiting list and enter the store at the designated time.

But even so, the demand for Supreme products is still growing, the stores are still full, and the brand has to continue to expand its store footprint. The new Supreme Brooklyn store is the brand’s second store in New York, covering approximately 3,000 square feet (about 279 square meters).

Above: Supreme Brooklyn

Former Supreme Brand Director Angelo Baque said: “In fact, Manhattan stores are at full capacity, and we can’t serve more customers and sell more products.” Angelo Baque started his own creative company after leaving the company, but still responsible for coaching The creative direction of the Supreme brand.

The newly opened retail space follows Supreme’s usual retail formula: wooden installations, sparse product displays, skateboard videos on flat-screen TVs, and a few concrete seats. The store also has an indoor skating area, and Baque said the in-store skatepark will be open to skateboarders, as determined by the store manager Jefferson Pang. Jefferson Pang worked at DC Shoes for 10 years.

“We want a store close to the city center that will not inconvenience our Manhattan customers, but also a larger store with more skateboarding elements, which is very similar to the Los Angeles space,” Baque said. The products offered at the SoHo store in New York will also be sold in this store.

Outside of New York, Supreme also has stores in Los Angeles, London, Paris, and Tokyo, and has launched an e-commerce website.

Baque said that joint collections with luxury brands such as Louis Vuitton will not change the way Supreme operates. “As usual, the co-branded series has brought us different customer groups, such as more Louis Vuitton customers. These customers did not know us before, but now they have become our target customers.”

There is no doubt that Supreme’s broad appeal and still modest audience have won the favor of private equity funds such as Carlyle. The investment goals of private equity funds have always been those potential brands that can excel in multiple markets and still have a lot of room for growth.

Carlyle has invested in many fields. In 2008, Carlyle acquired a 48% stake in Italian luxury brand Moncler and became the largest shareholder. In the next few years, Moncler developed rapidly. From 2008 to 2010, 33 new stores were opened in major global markets, and sales growth in the Asian and American markets was particularly prominent. In December 2013, Moncler was listed on the Milan Stock Exchange (for details, see Hualizhi: [Orange Bay Classroom] Jiuding Investment Zhang Kai: Re-examination Carlyle exited the Moncler case and took the initiative in the investment game).

In 2012, the Carlyle Group acquired a 70% stake in the Italian fashion brand Twin Set, which was increased to 90% in 2015, and increased to 100% in the first half of this year. 100% equity of fashion brand Twin Set, founder leaves);

In December 2015, Carlyle acquired Hunkemöller, a 100-year-old Dutch underwear retailer from the private equity fund PAI Partners. The specific amount of the transaction was not disclosed. );

In February this year, Carlyle acquired the Italian light luxury footwear brand Gloden Goose Deluxe Brand, which is their fourth acquisition in the European fashion industry (see “Glory Magazine”: Carlyle Group confirms the acquisition of Italian light luxury wave) The entire equity of the shoe brand cheap golden goose);

In the first half of this year, there were reports that Carlyle intends to acquire Giambattista Valli, a well-known Italian designer’s brand of the same name.

Carlyle’s other major investments in the consumer sector include:

Skincare brand Philosophy (sold to US beauty giant Coty Inc. in 2010);
Beats by Dre, headphone and recording equipment brand founded by rapper Dr. Dre and former chairman of Interscope Geffen A & M Records Jimmy Iovine (sold to Apple in 2014);
Hair care brand Vogue International (sold to Johnson & Johnson in 2016).
At present, Carlyle is raising its sixth M & A fund in the United States, with a total amount expected to reach US $ 13 billion and investing in various fields such as consumer goods.

Jay Sammons, head of the Carlyle Group ’s global consumer goods and retail team, said in an interview with WWD, an American fashion business media, earlier this year that they will not blindly pursue market heat when looking for suitable investment objects, and more importantly find those who have Enterprises, business models and brands with sustainable growth potential.

“The mainstream model of the retail market is evolving from traditional retail to modern retail. Modern retail is very important. It can be physical stores or e-commerce. Consumers still need to buy things, but their shopping preferences and habits have changed. . Brands must launch more innovative ideas and products. Compared to before, a good idea is easier and faster to grow and develop in the current environment, and requires less capital. There are many factors affecting this environment, including Innovation, demographics, technological advancement, and so on, traditional retail models are no longer suitable for the current environment, and successful companies can only continue, “said Jay Sammons. (For more details, please refer to “Gorgeous Chronicles”: Jay Sammons, Carlyle’s consumer product investment director, talk about investment philosophy: the key is not how much investment, but how much value is being created)

From this perspective, Supreme has the upper hand in the considerations mentioned above.