Exclusivity drives demand. It’s how luxury and streetwear products resell for many times their original value. Take that exclusivity away, and brands can go downhill fast.

VF Corp (owner of brands like The North Face, Vans and Supreme) is learning that the hard way. Down 80%+ from its 2020 peak,VFC

is trading at its lowest level since 2009.

VFC was hit especially hard during the pandemic — but its problems run deep through its most important brands:

• Riding the Vans: Since VFC acquired Vans, sales grew from $325M in 2004 to $3.7B last year — with its shoes hitting mainstream popularity again.
• Growth slowed in recent years. JJK Research Associates’ retail analyst said, “[Vans] are out of style and out of sync with fashion” — with no new product that resonates (BoF).

Supreme is following a similar path

Cultural phenomenon Supreme is known for its exclusive product drops that would sell significantly higher prices in the resale market.

In 2020, VF Corp bought Supreme for $2.1B — and like Vans, Supreme is also running into similar problems:

• Supreme began losing the exclusivity factor that made it so popular — as product drops grew more frequent.
• Items were selling for closer to their actual value in recent years.

The premium of Supreme products in the online retail marketplace StockX fell from 67% in 2020 to 57% in 2022.

Turnaround in progress

In 2022, VFC moved Vans’ ex-president (2009-2016) back into the struggling brand to initiate a plan that includes dropping weak wholesalers, introducing new styles, focusing on fewer but bigger campaigns and revamping stores.

• This year, VFC was forced to cut its dividend (6.8% current dividend yield) — after consecutively raising it for 49 years.
• With a 0.6x price-to-sales ratio, VFC is trading at its cheapest level in nearly 20 years.

If the turnaround takes shape and VFC returns to growth, we could see a strong rebound on the other side of a “recession.” Fashion is cyclical, and what’s out of style today can come back again.