Just as Mayor Bill De Blasio cut the ribbon on Supreme’s second New York store, in Brooklyn, speculation swirled that the elevated skatewear brand has even bigger developments ahead.
Sources buzzed Thursday that private equity giant The Carlyle Group could be close to a deal to invest in the company, which was founded by James Jebbia in 1994 and steadily worked its way into the hearts of the downtown cool kids and eventually fashion at large.
Terms of any potential deal could not be learned, but it would be a boon to both companies. Carlyle would be acquiring a stake in one of the fastest-growing brands in fashion — and one that has completely rewritten the rules of retail with limited product runs regularly “dropped” at its stores which then quickly sell out. Backing from Carlyle would give Supreme added financial muscle in a streetwear world that is becoming increasingly competitive.
Meanwhile, in a retail world where giants are struggling with sales declines and searching for direction, Supreme has had problems of a completely different kind: How to manage the heaving crowds looking to get into its Manhattan location, which was about to burst at the seams.
The streetwear brand had alleviated the lines and crowds with a new release system — customers no longer need to camp out because they put their names on a list and enter the store during a designated time slot — but demand for Supreme’s products has continued to increase, which is why the team opted for a 3,000-square-foot store in Brooklyn at 152 Grand Street between Bedford Avenue and Berry Street.
Outside of New York, Supreme has stores in Los Angeles, London, Paris and Tokyo, in addition to its web site.
Surpreme deftly linked with brands such as Schott, The North Face, Vans, Stone Island and Playboy, shoring up and broadening its skate base. A hook-up this summer with Louis Vuitton on pop-up stores selling a collaboration collection with the French luxury brand spurred rumors, which were ultimately unfounded, that the brand had been bought by the luxury giant.
That broad appeal and still-small base makes it something of a textbook growth story for the savvy private equity set, which looks for brands that have proven they are for real across several markets but still have room to grow.
Carlyle is working on its sixth U.S. buyout fund — a $13 billion pool of money being put to work across consumer and a number of other sectors. The firm’s investments include skin-care brand Philosophy (sold to Coty Inc. in 2010), Dr. Dre and Jimmy Iovine’s Beats by Dre (sold to Apple in 2014) and hair-care player Vogue International (sold to Johnson & Johnson last year).
Carlyle’s consumer and retail team is led by Jay Sammons, who told WWD earlier this year that he’s looking not so much for what’s hot now, but “businesses or business models or brands that are going to endure for a very long period of time.”
“There’s a big market-share shift away from what I would refer to as traditional retail into modern retail,” Sammons said. “Modern retail is going to be very important — and it can be bricks-and-mortar and it can be e-commerce.
“I don’t think retail is dead,” he said. “Consumers still want to buy things but have tastes and preferences that are evolving and changing. Companies are coming up with new and innovative ideas and products. I think great ideas can be built into big companies faster and with less capital than ever before….And I think traditional retail was not built to be nimble in that kind of environment. I think there’s a technology component to that, there’s an innovation component to that, there’s a generational component to that. That, to me, is the rub — and I think there will be winners and losers.”
And Supreme has certainly been winning lately.
“The truth is we maxed out on the Manhattan space. We were at capacity,” said Angelo Baque, Supreme’s former brand director who started his own creative agency but still oversees art direction for the company. “We couldn’t serve any more customers or sell more items.”
The new, larger space follows Supreme’s retail formula: wooden fixtures, sparse merchandising that lines the perimeter of the store, a flat screen playing skate videos in the window and a couple of concrete blocks for seating.
The store also features an indoor skate bowl, which Baque said would be open to skaters based on the manager’s discretion. Jefferson Pang, who left a 10-year stint at DC Shoes, is the shop manager. He most recently served as director of DC specialty sales.
While the shop isn’t on a retail-heavy block, it does sit across from Fool’s Gold, the independent record label and apparel brand that probably attracts customers of the same ilk as those found at Supreme — and it isn’t too far from Williamsburg’s central shopping areas.
“We wanted to have a store that was close enough to the city that wouldn’t inconvenience our Manhattan shoppers, but at the same time a bigger store with more of a skate element that’s very similar to the L.A. space,” said Baque, who added that it will carry the same merchandise that’s available in the SoHo location.
Supreme has slowly built a strong brand by being extremely consistent and following the simple rules of supply and demand. And Baque said all the collaborations, most recently with Vuitton, haven’t changed how Supreme operates.
“It’s business as usual,” said Baque. “I think it opened us up to a different demographic; more of the Vuitton luxury customer. The customer that didn’t understand what we did or who we are, but now we are on their radar.”
Indeed, it seems Supreme’s pinging a lot of people’s radars these days.