Japan made Supreme


November 11, 2020

PLUS: A $2B+ virtual events startup.
November 11, 2020
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The Big Idea
Supreme logo

Supreme was just acquired for $2.1B. Here’s how Japan made the fashion brand huge.

Supreme knows how to capitalize on hype.

Renowned for its limited drops and highly coveted streetwear, the brand has bloomed into a $500m/year fashion empire.

And big-money investors have taken note: On Monday, VF Corp — the owner of Timberland, The North Face, and Vans — bought the company for $2.1B from the private equity firm Carlyle.

It started with a skate shop

Supreme began in 1994, when founder James Jebbia opened a skate shop in SoHo, New York, that sold custom T-shirts.

Jebbia’s ambition was to be a “clubhouse” for New York’s skateboarding scene. But that all changed when he was approached by a businessman from Japan.

Jebbia agreed to open 3 stores in Japan over a 6-month span in 1998. Going international encouraged Jebbia to think of Supreme as a brand, and he expanded from T-shirts to all types of apparel.

In the 1990s, Japan was a cultural trendsetter, and Jebbia built Supreme’s brand in East Asia before bringing it back to America.

Supreme uses a network of North American manufacturers

Instead of mass manufacturing in China, the brand was “committed to producing small but high-quality runs of clothing,” writes Complex.

In the early 2000s, Supreme implemented a lottery system for Japanese customers to wait in line, a la new iPhone releases.

Over the years, its elevated brand led to splashy collaborations with the likes of Rimowa, Nike, and Louis Vuitton.

In 2017, PE firm Carlyle Group bought 50% of Supreme for $500m

Carlye currently manages $200B+ and has a controversial past, with various deals in the defense sector.

But the PE giant also knows how to flip culturally important assets, buying 50% of Beats for $500m in 2013 before the headphone company sold to Apple for $3B less than a year later.

With Supreme’s $2.1B sale to VF Corp, Carlyle scored a casual ~2x return on its streetwear investment.

Can the brand keep its allure?

Dan Runcie, who writes on the business of hip-hop at Trapital, notes that VF Corp’s strength is in extending the shelf life of mass-market brands.

The North Face (acquired 2000), Vans (2004), and Timberland (2011) still sell. The problem is that the brands do so through less-than-trendy retailers.

Runcie asks if Supreme fans will still love the brand if they get “an additional 10% off if they sign up for a Macy’s credit card.”

Unfortunately for Supreme, that’s a question that can’t be answered by going to Japan.

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Snippets
  • People are making “deepfake” music, including bringing back the voice of past greats like Frank Sinatra. This is probably going to end well for the music industry.
  • This “electronic nose” can sniff out bad meat, by scanning a barcode that changes color from gas-emitting rotten meat.
  • Amazon just got slapped with antitrust action from the EU for taking real-time data from vendors to inform its own private-label decisions. Sounds legit.
  • Ahead of the massive Singles Day shopping extravaganza, China’s regulators are getting in on the antitrust fun and are looking to rein in their own tech giants.
  • Peloton teamed up with Beyonce to make fitness content. Hilariously, the Peloton Facebook group prefers Mariah Carey (or Rob Zombie).
  • Bonus: Apple’s new MacBook Pro (with its own M1 chip) is the “world’s fastest CPU core” and starts at $1,299.
 
Supremely Priced

Supreme’s most expensive items

Listen, I own a lot of Air Jordans (shoutout to the Concord 11s).

I get why people drop money on fashion. But holy smokes, some of this Supreme stuff is crazy… its limited runs lead to crazy resale markups.

Grailed — a secondary marketplace to buy and sell menswear — has 136k+ Supreme items listed for auction.

Here are some of the priciest, based on listed price (as of Nov. 10, 2020):

P.S. Supreme has clearly notched some huge collaborations with Louis Vuitton. Investor Blake Robbins believes that the brand’s sale to VF Corp “instead of [French fashion house] LVMH is a travesty.”

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Larry Bird towel wave gif

Hopin is poppin’: European online events startup is valued at $2B+ after latest fundraise

At The Hustle, we are very careful to ration our use of the “Larry Bird towel wave” GIF. For us to break out Larry Legend, something truly momentous has to happen.

Well, today is the day: Hopin — the European online events startup — just closed its 3rd funding round in 2020 and is valued at $2.1B.

More importantly for us, its head of marketing is former Trends contributor Dave Schools. #CONGRATS

The growth has been staggering

Per TechCrunch, the number of monthly attendees of events on the platform has skyrocketed from 16k in March to 3.5m+ today.

Annual recurring revenue has also exploded from $0 to $20m.

With $171m of funding in hand, Hopin looks to expand from 215 to 800+ employees over the next year.

A vaccine won’t dent the company’s vision

Hopin’s CEO Johnny Boufarhat says his original vision was for hybrid events, which TechCrunch takes to mean “allowing IRL events to merge with online experiences.”

One bull is investor Samil Shah. In previous years, he’s anointed “breakout startups”: Stripe in 2012, Snap in 2013, Slack in 2014, and Coinbase in 2017.

Guess who Shah’s 2020 breakout startup is (unfortunately for his portfolio, he has “no connection” to Hopin).

Now, we’re not saying that Hopin is Trends’ first official unicorn… what we are saying is that you need to come join our awesome community.

***

(In light of this news, we created a special $100 off Trends discount code: unicorn. If 10m of you use the code here, we’ll have given away a unicorn in value — LOL.)

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Q&A
Laurie Yoler headshot

‘Don’t wait for things to come your way; go out and forge your own destiny’

Laurie Yoler — a general partner at the VC firm Playground Global — has had a long and successful career in tech.

She’s worked at Accenture, Visa, Sun Microsystems, and was a founding board member (and early investor) at Tesla. She’s also served on the board of 20+ public, private, startup, and nonprofit organizations.

We recently asked Yoler to share some career insights. Here’s an excerpt from our conversation.

What’s one mistake you made in your career, and what did you learn from it?

I’m an optimistic, hardworking, self-motivated person, so I thought I could fit into any culture. 

I learned that even if you are offered a great job title, scope of responsibility, and salary, being aligned with the values of the organization is still paramount.

It’s about being in an environment where you feel heard, valued, and understood for the unique strengths that you bring.

At a certain point, if you’re still trying to sell yourself, it’s not the right fit.

What’s the best piece of advice someone ever gave you?

When I first started at Sun Microsystems in 1993, I cornered CEO Scott McNealy and asked him what the strategy was for Sun in commercial markets.

He looked at me incredulously and said: “If I knew the answer to that, why did I need to hire you!?!”

That was exactly what I needed to hear to propel me forward. The advice I give to others now is: Don’t wait for things to come your way; go out and forge your own destiny.

Who’s the most interesting person you know?

My husband, Ben LeNail. After being diagnosed with a deadly genetic disease — adrenoleukodystrophy (ALD) — and being told he likely only had 2-5 years to live, he refused to sit around and grieve.

He started multiple foundations, funded a lab at Stanford focused on ALD research, and offered his time to mentor young professionals, especially women, around how to negotiate and stand up for themselves at work.

(Read the full Q&A here.)

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