VFC.US's VF agreed to sell Supreme to EssilorLuxottica for $1.5 billion, trading up nearly 8% premarket.

VF Corp.(VFC.US) announced a major transaction on Wednesday, agreeing to sell its Supreme brand to EssilorLuxottica for $1.5 billion in cash. The deal is expected to close by the end of this year, subject to certain closing conditions and regulatory approvals.

Supreme operates as a digitally focused business with 17 stores across the United States, Asia and Europe. Despite the growing influence of the Supreme brand in key markets such as the United States, China and South Korea, and a recovery of strong growth momentum, VF believes that the synergy between the Supreme brand and its overall business model is limited. As a result, the sale of the Supreme brand is a natural choice for VF as part of its strategic realignment.

Bracken Darrell, CEO of VF, commented on the transaction, saying, "While we continue to adjust our investment portfolio, this sale makes our balance sheet more flexible and supports our overall plan to position the company for long-term growth while maintaining a more normalized debt level."

Although the sale is expected to have a dilutive effect on VF's 2025 earnings per share, the market reaction to the news has been positive. As of the time of writing, VF's stock price is up 7.81% in pre-market trading, indicating investor optimism about the transaction and its implications for future growth.