Why is Silicon Valley Backing Trump? + A Glasses Company Acquires Supreme | Prof G Markets

Supreme Acquisition

The acquisition of Supreme by Luxottica, the eyewear giant, has raised eyebrows due to its seemingly mismatched nature. Ed Elson highlights that Luxottica's purchase price of $1.5 billion is significantly lower than Supreme's previous valuation, causing a 4% drop in Luxottica's stock 1. Scott Galloway criticizes the move, noting that Supreme's revenue growth has stagnated, making it a questionable investment 1. He reflects on the acquisition history, pointing out that the Carlyle Group profited significantly by timing their investment perfectly 2.

This was sort of a pretty unusual in public, a stub toe, if you will, buying it for 2.1 billion and then selling it.

--- Scott Galloway

The discussion underscores the complexities of brand valuation and strategic missteps in the acquisition process.

   

Eyewear Monopoly

Luxottica's dominance in the eyewear market is likened to a monopoly, with its control over pricing and distribution channels. Scott Galloway explains that Luxottica's strategy might involve using Supreme as a new distribution channel for its eyewear, leveraging Supreme's relationships with emerging brands 3. He criticizes the eyewear pricing, noting how Luxottica's near-monopoly status allows it to charge exorbitant prices for glasses 3. Galloway also shares a personal anecdote about the eyewear market's pricing disparities, highlighting the impact of companies like Warby Parker in offering affordable alternatives 4.

Luxottica has always been. I always thought Luxottica was an example of monopoly that kind of flew under the radar.

--- Scott Galloway

This section reveals the strategic maneuvers Luxottica employs to maintain its market dominance.