https://www.highsnobiety.com/2017/10/09/supreme-stocks-billion-carlyle-group/?

After Supreme founder James Jebbia confirmed the sale of a minority stake of Supreme to private equity giant the Carlyle Group (and was typically tight-lipped about it), possible further details of the deal have now been made public, however nothing has been confirmed as of yet.


As Women’s Wear Daily reports, Supreme has allegedly sold a 50 percent stake in its business to the Carlyle Group for around $500 million. If true, this would put Supreme’s enterprise valuation at around $1.1 billion, $1 billion in equity and $100 million in debt.

According to WWD’s sources, the deal was kept under wraps because Jebbia feared if the sum became public knowledge, it could hurt the street cred Supreme has meticulously cultivated since its establishment.

The report goes on to claim that Supreme has projected earnings of $100 million. With the valuation being more than 10 times that, the big question is what Supreme will do with all that money. Supreme lives off of exclusivity and the fact that more people want their product than can actually have it.

Although Supreme’s true profitability is unknown, WWD speculates that the projected earnings are a step up from the current revenue Supreme generates, meaning some of the investment will need to be used to expand the business, something that directly contradicts its current business model of scarcity.

All signs point to expansion in Asia, where the brand already has six stores in Japan, but none in China, Korea and Hong Kong — all massive markets that could help Supreme reach the projected revenue.

More stores generally mean more stock, which makes Supreme less limited and therefore, by definition, less cool. But industry insiders such as Agenda Trade Show founder Aaron Levant believe more stock directly benefits consumers that miss out and have to pay resale.