How Supreme Grew a Badass $1 Billion Business

When James Jebbia started Supreme from a single store on Lafayette Street, it was inconceivable that this company would grow to become one of the biggest fashion brands in the market. But here we are. Supreme has become more of a global fashion cult than just a company. So, how did he really do it? How did James Jebbia turn a small scrappy start-up into a $1 billion company? Well, it has a combination of many factors.

What has really set Supreme apart from many other top fashion brands is its business model. James Jebbia wanted to create a cool fashion brand that despite its splendor and glamour could still be accessible for a small price. But that was not everything. Supreme also had a good deal of financial investors and backers who have so far financed the growth of this fashion brand to massive success.

It was reported back on October 6 that The Carlyle Group had acquired a significant stake in Supreme. The news was later confirmed by the company’s founder James Jebbia. Jebbia noted in a statement confirming the buy-in that the move was strategic and that the operational expertise that Carlyle brought to the table was essential in keeping the global fashion brand on the growth path moving forward.

Supreme launched in 1994. In over 20 years, the brand has had its highs and low but nonetheless, it has remained one of the top performing fashion companies in what’s already a very competitive and dynamic market. This is always a positive sign in brand management. Jebbia was clear that the investment by Carlyle would allow him and his team to focus on what they do best. One of the core competencies at Supreme has always been innovation in design.

Although it’s clear that the fashion brand has already acquired some street cred and massive recognition all over the world, innovating to meet the dynamic needs of the changing fashion market is the biggest challenge. It appears though that for two decades, Supreme’s innovations have played a key role in maintaining its growth.

The details of the Carlyle investment were not disclosed but inside sources in the company indicate that the initial investment was around $500 million. Carlyle would get a 50% stake in the business valuing Supreme at $1 billion today. However, even with the spotlight on this massive investment, it’s important to remember that Carlyle is not the first external investor to put money in Supreme. Yes, the company has had other partners and until now, these partners have been pretty much top secret.

In 2014, a private equity firm in New York called the Goode Partners invested money in Supreme, taking a minority stake in the company. However, Supreme was never listed in the portfolio of companies that Goode Partners had invested in. The fashion brand and its founder James Jebbia never spoke of this deal in the public domain. Details about the partnership were also tightly sealed. Other than the fact the Keith Miller, partner at Goode sat on Supreme’s board, there wasn’t any other clue that linked Goode Partners to investments in the global fashion brand.

The role played by Goode Partners in helping Supreme grow was huge. The private equity firm provided capital and operational expertise that was largely credited with helping Supreme improve its retail network. In addition to its very first store in Lafayette Street, Supreme has already established stores in major cities all over the world like London, Paris, Los Angeles, New York and also in Japan.

The fashion brand has also revamped its e-commerce business. It’s estimated that a big chunk of total yearly sales come from e-commerce. Goode has been credited for providing the required support to scale up Supreme’s presence online and to increase its sales. Keeping this partnership silent appears to have significantly benefited both Supreme and the Goode Partners. As the fashion brand grows even further, there will come a time when it will need a strategic partner and perhaps this is the exit that Carlyle is planning. An IPO option is still open for the brand too but we will wait and see. Click here for more financial news.

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