EssilorLuxottica is now in the luxury streetwear business.

The optical giant closed on its $1.5 billion acquisition of Supreme, ending the brand’s nearly four-year stay under the VF Corp. umbrella.

More from WWD

• Understanding Innovation, From Jony Ive at Moncler to the Nike C-suite

• The North Face, Comme des Gar?ons Launch Second Capsule

• EssilorLuxottica Extends Partnership With Meta for Smart Glasses

James Jebbia, Supreme’s founder, is expected to continue to run the business.

When the deal was first cut in July, Jebbia described EssilorLuxottica as “a unique partner that understands that we are at our best when we stay true to the brand and continue to operate and grow as we have for the past 30 years. This move lets us focus on the brand, our products and our customers, while setting us up for long-term success.”

EssilorLuxottica is a giant with more than 25 billion euros in revenues last year, 200,000-plus employees in 150 countries and 18,000 stores.

While it was well known that VF, which has been working on a major turnaround and looking to pay down debt it accumulated (in part from buying Supreme for $2.4 billion in 2020), the deal was a surprise and a bit of head scratcher for some investors.

A week after the acquisition was revealed, Francesco Milleri, EssilorLuxottica’s chairman and chief executive officer, said he was surprised by the surprise, telling analysts that the brand was not just profitable, but a “perfect” strategic fit.

“We think [of] Supreme as a communication platform, [it] is really a direct channel to an audience that is very difficult to reach,” Milleri said. “And this communication channel has a real great reputation that [it has] maintained for more than 30 years….It’s not so complex.”

Now EssilorLuxottica has a chance to put that strategy into action.

VF was never quite able to realize its own Supreme dream, with a broader corporate downturn and the COVID-19 pandemic scrambling supply chains and complicating business.

Last year, Supreme posted $538 million in revenues with operating income of $116 million. The brand both grew and remained exclusive, a digital-first business with just 17 stores globally, but VF had to repeatedly write-down the value of the acquisition.

The debt taken on to make the deal, combined with a dramatic slowdown in Vans business and other problems eventually led to the departure of VF CEO Steve Rendle in 2022.

VF has also been working to sell its backpack business and reviewed its entire portfolio, including Vans, The North Face, Timberland and Dickies, but the new CEO Bracken Darrell has said he’s done selling off businesses for now and is going in the process of rebuilding the company.