Investing in Supreme

Investing in Supreme

Being a customer of a company can help you as an investor. As a customer, you’re on the front lines of product and service experiences, with firsthand knowledge of the quality and value that the company is providing. This firsthand experience, combined with information about the company’s financials and the broader market, can help factor into your investing decision making process. Plus, isn’t it fun to invest in a brand you love?

About Supreme

Supreme began as a small skateboarding company in New York City in 1994, quickly becoming a staple of skating and downtown culture during the 1990s. Founded by James Jebbia, Supreme designs and produces skateboards, clothing, and accessories - including popular hoodies and backpacks. A second location opened in Los Angeles in 2004 and by 2017 Supreme had 13 stores across the globe. That same year, Supreme sold a 50% stake of their business to a private equity firm (Carlyle Group: CG) for around $500 million, valuing Supreme at about $1 billion. VF Corporation purchased Supreme 3 years later in 2020 for $2.1 billion.

Supreme has a strong cult following. The brand releases a new collection two times per year and is known for their Thursday “drops” when you can pick up new pieces from the collection. Supreme generally produces less product than the market demands and you can find their products for sale on secondary markets for a premium. The Supreme brand is valued for its quality, style, and scarcity. Supreme is also known for their collaborations with other artists and designers. The Supreme lines “Comme des Garçons x Supreme” and “Louis Vuitton x Supreme” were incredibly popular.

Supreme is owned by VF Corporation (VFC) which trades on the New York Stock Exchange (NYSE). Supreme is one of 13 brands owned by VFC.

About VF Corporation

VF Corporation is based in Denver, Colorado. The company was founded in 1899 and has 27,650 employees. VF Corporation is a global consumer goods company that focuses on apparel, including outdoor wear and leisure wear.

VF currently owns 13 brands:

• Supreme - skate ware
• The North Face – Outerwear and gear for outdoor sports and activities
• SmartWool – base-layers and socks for cold weather
• Icebreaker – Merino-wool clothing
• Altra – Athletic shoes for road and trail running
• Vans – skateboarding shoes and apparel
• Kipling – bags, backpack and luggage
• Napapijri – jackets, coats and backpacks
• Eastpak – bags, backpacks, and luggage
• Jansport – bags and backpacks
• Dickies – workwear clothing for the outdoors
• Timberland – outdoor footwear
• TimberlandPRO – work footwear

VFC recently divested 9 of their workwear brands so that they could focus on “a carefully curated group of outdoor and activity-based lifestyle brands that are strongly positioned for direct-to-consumer (DTC) growth and international expansion” (FY2022 Annual Report).

How to Invest in VFC

VFC is a publicly traded company on the New York Stock Exchange. You can buy a share of VFC stock and become a part owner of the company. Each share represents a fraction of the company – the more shares you buy the more of the company you own.

A stock is just one type of investment (also called a “security”). There are also investments called exchange traded funds (ETFs) and mutual funds. Funds are baskets of securities that are usually invested in multiple stocks, bonds, and other types of securities. The fund pools together the money of their investors so they can buy more shares and be more diversified.

You can buy a share of an ETF or mutual fund that is invested in VFC. If you invest in an ETF that holds VCF, you are getting a small investment in VFC, AND access to multiple other investments at the same time. In general, this is adding more diversification and helping to manage the risk of your investments (1). The cons would be that while stocks do not have any fees associated with them, ETFs and mutual funds have expense ratios (fees associated with the management of the fund). To learn more about ETFs and mutual funds, please visit: LINK TO ETF/ MF page.

What does it mean to be a shareholder? As a publicly traded company, the US government (through the Securities and Exchange Commission or SEC) requires VFC to publicly report financial information. This information is disclosed every quarter through 10-Qs and annually through a 10-K. These documents can be found on the Investor Relations section of VFC’s website. Most publicly traded companies also hold meetings called “earnings calls” every quarter. During the earnings calls the company will discuss the financial performance of the past quarter, answer questions and talk about expectations for the future. As a shareholder, you are also entitled to participate in annual shareholder meetings where you have the opportunity to vote on things like the board of directors of the company and corporate actions.

If you would like to invest in VFC, try the following searches on Magnifi:

• Invest in Supreme
• Invest in VFC
• Funds that hold VFC
• Competitors to VFC

References:

1. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.