A Supreme Amount Of Profit
By: Ben Miller
The hype is incredibly real for the streetwear band of Supreme, now more than ever before. Supreme which sells graphic t-shirts to hyped-up teenagers along with other apparel and accessories, now is worth over a billion dollars according to the Wall Street Journal. If that’s not impressive enough, they’ve managed to do it in roughly 23 years, upon their opening in 1994 and not only that, but they have simply 11 store locations and a single exclusive online shop. Along with that, Supreme has managed to put together collaborations with other exclusive brands such as Louis Vuitton and Nike, with some of their pieces re-selling for as much as $75,000. Supreme has managed to completely revolutionize the entire streetwear industry, while still managing to maintain the exclusiveness of their products.
Supreme has a provocative business model for the kind of market in which their in, but it prives to be extremely successful for them due highly to the fact that the demand for their products is through the roof. Supreme drops new products every Thursday at 11:00 a.m. Eastern time within the weeks on their 2 specific seasons throughout the year, (Fall Winter, Summer Spring), which makes their products extremely exclusive. The demand as stated before is incredibly high and is so high in fact that their products have proven to be price inelastic, all selling out within just minutes, meaning that no matter how much Supreme retails their products, their consumers will always purchase it. For example to show the absolutely un-real hype, Supreme dropped a pair of chopsticks with their box logo on it, and it sold out in nearly 30 seconds, leading to an incredible amount of profit off just one basic item.
With this said, in my opinion based off the facts, Supreme is in a position to only move up in value as a company, with the hype dieing out nowhere in site. The company recently sold a 50% stake in their business to the Carlyle Group for a whopping 500 millions dollars. This investment from the Carlyle Group shows alone that Supreme is promised for explosive group, a big firm like this doesn’t play games with potential profiting companies. The brand has never showed signs of doubt when it comes to the hype outside of the United States as well. According to executives at the company it takes simply one trip to the store in Soho, China to see that the supply completely outweighs the demand, thus working to create a prestigious label to anything the brand sells. Supreme also has very little competitors, as their products are viewed as a much more exclusive apparel brand than the majority of the stream-line brands such as Adidas, Gap, Polo, Tommy Hilfiger, and etc. This also provides Supreme with the opportunity to not have to differentiate their products as much as some of these other brands have to, and gives Supreme no price competition in consideration with other streetwear brands. Supreme is simply on track to becoming the new Louis Vitton, Michael Cors, Nike, and etc, with the hype backing the streetwear company seeming endless, and with it dominating a market that never seems to die out.
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Safdar, Khadeeja. “Why Streetwear Brand Supreme Is Worth $1 Billion and Abercrombie Isn't.” The Wall Street Journal, Dow Jones & Company, 18 Oct. 2017, www.wsj.com/articles/why-streetwear-brand-supreme-is-worth-1-billion-and-abercrombie-isnt-1508331601.
“This Is Supreme Economics Broken Down and How to Retire off Reselling.” HYPEBEAST, hypebeast.com/2017/6/supreme-resell-economics-million-dollars.
Wolf, Cam. “Supreme Is Now a Billion-Dollar Streetwear Brand.” GQ, GQ, 9 Oct. 2017, www.gq.com/story/supreme-billion-dollar-valuation.