Estée Lauder To Going To Buy Tom Ford In $2.8 Billion Deal

estée lauder to buy tom ford

According to a source close to Estée Lauder Company, a deal has been reached between the company and Tom Ford for $2.8 billion.

The Wall Street Journal reported on Tuesday that the deal had been completed. Although Estée Lauder is the main buyer, it is likely that there will be multiple partners involved, as the beauty conglomerate is unlikely to attempt to enter the ultra-competitive luxury fashion market alone. It has been reported that the Tom Ford brand has an estimated value of $3 billion.

In response to requests for comment, neither company responded immediately.

The European fashion group Kering – which owns Gucci, Yves Saint Laurent, and Balenciaga – had been in competition with Estée Lauder to acquire the Los Angeles-based luxury brand. (Tom Ford became famous in the 1990s after he transformed Gucci from a worn-out Italian heritage brand into the hottest fashion line of the decade.) A report indicates that Kering, with whom Ford and his business partner, Domenico De Sole, parted ways in 2004, is considering developing a beauty business of its own, and owning Tom Ford, a brand known for its suiting and glitzy womenswear, but primarily a cosmetics and fragrance company, may have been a viable option.

An ex-executive of Estée Lauder, which launched the Tom Ford brand in 2005 as its official beauty partner, told Fortune magazine that severe ties – and losing profits – would be detrimental. It is anticipated that owning Tom Ford outright will generate more profits for the company, which has been shifting its focus away from less lucrative licensing agreements over the past few years. As per NPD, Tom Ford also occupied a prominent position in the prestige makeup and fragrance categories during the second quarter of 2022, both of which grew by 18 percent and 13 percent, respectively.

Nevertheless, the fashion industry has never been more difficult to break into now that a few European heavyweights control the supply chain. It is unlikely that Estée Lauder will be interested in entering the market independently.

It is noteworthy that the Ermenegildo Zegna Group, which has built a robust menswear business through its namesake line as well as through the acquisition of the American label Thom Browne, has held the license to Tom Ford men’s apparel and footwear for the past 16 years. Since 2005, Marcolin has distributed Tom Ford optical frames and sunglasses.

After this transaction, they may very well continue to do so, but it is unclear what will happen to Ford’s womenswear collection.

Share With Your Friends


Never Miss A Story

Get our Weekly recap with the latest news, articles and resources.
Cookie policy
We use our own and third party cookies to allow us to understand how the site is used and to support our marketing campaigns.