Off-White Sold on Virgil Abloh’s Birthday: Is Streetwear over?

Yesterday would have been Virgil Abloh’s 44th birthday and was the day LVMH, where Abloh served as Louis Vuitton’s creative director, announced they had sold his Off-White label. Sometimes you wonder if the people in the c-suite pay attention to the details or even care about the fans of a brand. Cold.

The deal to sell to Bluestar Alliance for an undisclosed amount comes just a few months after Supreme was sold by VF Corp, to EssilorLuxottica at a $600 million loss. So, does this mean streetwear is over?

Well, in a word, no. But times are changing as streetwear evolves, consumer habits broaden and the luxury market rides out declining sales due to the economy. This is also a tale of corporate brands not understanding what made the brand attractive in the first place.  

The New Luxury Era

When LVMH bought Off-White in 2021, streetwear and luxury were colliding through a range of must-have collabs and the top end of the fashion market was inspired by streetwear’s aesthetics and drop model. The term most bandied around to sum up this new era of high and low was ‘New Luxury’ and naturally Virgol Abloh personified this world and solidified this marriage with his LV Creative Director role.  

Streetwear was evolving once more as the ‘Hypebeasts’ era of drops and scarcity was opening up to brands from the high end, influencing product lines and collab partners. Abloh predicted this shift in an interview with Dazed back in 2019. 

“I would definitely say [streetwear is] gonna die, you know? Like, its time will be up. In my mind, how many more T-shirts can we own, how many more hoodies, how many sneakers?”

In 2020, VF Corp purchased Supreme for $2.1 billion. The skate brand had become the leading streetwear brand, disrupting the fashion retail model in the process and inspiring many with their Thursday drops. They had already taken substantial investment from The Carlyle Group before the owner of Vans, The North Face and Timberland took over, brands who had collaborated with Supreme before.

Satisfying the streets and the shareholders

Both deals made sense at the time, to a degree. Streetwear was exciting for any luxury or big fashion group to get involved with. Off–White was hitting three figure millions yearly sales while VF Corp had a chance to own the biggest streetwear brand, who they’d already seen success with during the collabs with Vans, Timberland and The North Face.  

But both deals would have been met with caution by the brand's fans, particularly Supreme given its long lasting cultural appeal had spanned decades by the time of sale. 

Brands like Volcom, Zoo York, Anti Social Social Club and even BAPE have all had their credibility impacted by investment and takeovers which pull the brands into different directions. 

The moment an independent brand is bought by a big corporate group, it’s a completely different world. It has to justify its value and show a return. It’s got targets to hit and a C-suite to keep happy. Now you’ve got the push and pull of satisfying the streets and the shareholders. 

Suddenly the brands must scale quicker as the appeal broadens but maintaining relevance with the core becomes the challenge that has proven to be hard to meet. Both brands' efforts in their corporate era were mixed. 

VF Corps had unreasonably high expectations when they bought the brand. “We see no upside limitation on the brand,” CFO, Scott Roe told investors. “We see a clear line of sight to a billion dollars.”. 

You don’t scale to a billion dollars without making trade-offs in the characteristics that made Supreme such a culturally credible and exciting brand in the first place.

Supreme quickly expanded from 12 to 17 stores. This meant more product was needed to supply the stores and before you know it, the brand started becoming just that bit too accessible. We’re not talking mass retail and the brand still lives through its own channels with little to no wholesale, but this increase in product had an impact on how the culture saw it.

Sales initially dropped but have since climbed to $538 million, still shy of targets. Search volume for Supreme was down and even resale demand cooled. For the first time in StockX’s history, it was no longer the number one in apparel. The brand accounts for 16% of the resale platform’s apparel category, down from 36% in 2020. 

VF Corp brands rely on a wide distribution model with branded retail & ecommerce combined with wholesale. While Supreme has notoriously earned its stripes via limited product numbers across branded retail and ecommerce with only the occasional drop landing at Dover Street Market.   

During the sale VF Corp stated in a press release that there were “limited synergies” between itself and Supreme. A far cry from the billion $ a year ambitions. 

Scarcity and growth are polar opposites. 

Off-White was Virgil Abloh and Virgil Abloh was Off-White. The sad and untimely death of the man meant it was always going to be difficult for the brand to maintain cultural credibility and relevance without him. Living up to his legacy was always going to be a tough ask for the creative director Ibrahim Kamara. Demand in the brand dropped. 

They were also hit by organisational changes in a complicated structure. The people Abloh was close with, the founder of licenser New Guards Group (produced & distributed Off-White) Davide De Giglio and the CEO of Off-White Andrea Grilli both left. The demise of Farfetch also hit the brand, as they were the platform’s biggest earner and when they bought New Guards Group, they took on the manufacturing of Off-White.  

Streetwear’s Customer Evolves

The biggest shift is the streetwear consumer is changing and no longer found head to toe in one or two brands as the number they now buy and places to source them expand.

In another foreshadowing of future events, Abloh spoke in the same Dazed interview of where fashion was going, that is now a reality which has changed the influences of the streetwear consumer.

“I think that like we’re gonna hit this like, really awesome state of expressing your knowledge and personal style with vintage — there are so many clothes that are cool that are in vintage shops and it’s just about wearing them,” he continued in Dazed. “I think that fashion is gonna go away from buying a boxfresh something; it’ll be like, ‘Hey I’m gonna go into my archive.’”

Vintage continues to grow as an affordable and accessible way to buy brands but also means you have to work harder to find the right things to make up your outfit and wardrobe. 

It brings a sense of discovery and reward. Whether it’s vintage Gucci or a retro football jersey it signifies something you’ve researched and sourced, rather than simply followed what this Thursday’s drop is. 

Herein lies where we’re seeing a change as the consumer moves from status signified through the limited drop products with resell value to status signified through personal tastes and knowledge. 

“The average consumer is just more educated now and has a better sense of self,” said Luke Fracher to Business of Fashion in a recent interview after the former Round-Two co-founder opened his second Luke’s outpost in Los Angeles. “They used to come in and just buy a random $100 Supreme or BAPE tee. Now, people want certain items to complete their fit and are not grabbing stuff for the sake of grabbing it anymore.”

There’s more emphasis on personal style and mixing and matching where the brands and influences come from. 

Streetwear will still exist, it’s not going away and players like Corteiz and Free The Youth are generating the sort of acclaim reminiscent of early Supreme and Palace. 

While the likes of Aime Leon Dore, Wales Bonner, adidas, Pharrell’s LV and Rick Owens are all finding space in the wardrobe to contribute to this broader mix. 

The mixing and matching of streetwear and luxury, the very thing which Supreme and Off-White played their part in and made them attractive acquisition targets in the first place may also have been the thing that impacted the broadening of luxury brands appeal in a wardrobe. 

Look at what Hypebeast and High Snobiety report on. They couldn't just make a living writing about Thursday drops and both very quickly broadened the brands they wrote about and it shows their influence on readers in this broadening of taste. Retailers like SSense, Dover Street Market and END have also played their part. Come for the Carhartt, stay for the Comme des Garçons. 

Chris Gibbs, of the iconic and influential Union store and early stockist of Supreme and Off-White recently commented to the Washington Post on this change from big logos to style. “Fashion is more free than it’s ever been,” Gibbs said. “As a fashion fan, I love it, but as a retailer, my existence revolves around trying to put a box around it.

The Next Stage

So what happens now for Supreme and Off-White?

For their new homes they stand out as unnatural bed fellows. Off-White joining Scotch & Soda and Supreme joining Oakley and Ray-Ban. It will be interesting to see how they manage both brands in a changing landscape. The streetwear consumer will continue to evolve and people are guarding their wallets more closely. In a '2024 State of Fashion' report by McKinsey they record that consumers intend to reduce their net spending on apparel by 29% in Europe and 25% in the US.

Can these holding groups grasp what made them special in the first place? Will they focus back on the core consumer or is growth still the goal? 

Supreme’s founder James Jebbia suggests EssilorLuxottica may have a better grasp of the brand than VF Corp did and may not be pushing growth at all costs. “In EssilorLuxottica, we have a unique partner that understands that we are at our best when we stay true to the brand and continue to operate and grow as we have for the past 30 years.”

The picture seems less clear for Off-White. Bluestar Alliance focuses on licensing the names of distressed brands and it’s not inconceivable to think manufacturing quality could suffer if a mass-market route is pursued. 

When Stüssy went to the masses through wholesale partners like ASOS and Urban Outfitters it lost the allure with those that made the brand. Now Stüssy continues to go from strength to strength as without a corporate group to answer to it could drastically pull back on wholesale accounts to establish its cool factor again. 

It provides a cautionary tale to Off-White’s future and hopefully the new guardians of the brand can find its core credibility again. 

Whatever happens at this fork in the road for Off-White, it will always be a part of Virgil Abloh’s legacy and a key protagonist in fashion’s evolution when the runway and street collided.    

“The goal of Off-White is not to buy Off-White; it’s to know about it” Virgil Abloh. 2018.