Inside Estée Lauder’s US$2.8 billion acquisition of Tom Ford: the beauty giant’s biggest-ever deal would be a historic moment for the former Gucci and YSL designer, joining MAC and Clinique

Nov 16 , 2022

Designer Tom Ford acknowledges attendees after presenting his spring/summer 2023 collection during New York Fashion Week in Manhattan, New York City, US, on September 14. Photo: Reuters

Estée Lauder Cos. is close to announcing a deal for US luxury brand Tom Ford, according to people familiar with the matter.

The transaction will include licensing agreements of Tom Ford’s eyewear and apparel businesses to other brands, said one of the people, who asked not to be identified discussing private information. A deal could value Tom Ford at about US$2.8 billion, another person said.

Shoppers stand in line outside an Estée Lauder Companies Inc. store inside New Town Plaza shopping centre, operated by Sun Hung Kai Properties Ltd., in Hong Kong, in December 2018. Photo: Bloomberg

Representatives for Estée Lauder and Tom Ford didn’t immediately respond to requests for comment.

Tom Ford has a long history with licensing. Estée Lauder is a long-term licensee to the brand’s beauty and fragrance products.

A model presents a creation from the Tom Ford spring/summer 2023 collection during New York Fashion Week in Manhattan, New York City, US, on September 14. Photo: Reuters

All the company’s suits were licensed to and produced by Italian fashion house Ermenegildo Zegna Holditalia SpA until the autumn and winter 2022 collection, when the exclusive rights were to expire, according to Zegna’s annual report. Tom Ford’s eyewear is produced and distributed by Marcolin SpA, an Italian manufacturer backed by private equity firm PAI Partners.

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Tom Ford attends The Women’s Cancer Research Fund’s An Unforgettable Evening Benefit Gala at the Beverly Wilshire Four Seasons Hotel in February 2019, in Beverly Hills, California. Photo: AFP

The deal would be the largest-ever for Estée Lauder, a cosmetics giant whose brands include MAC lipstick and Clinique moisturisers. The Financial Times reported earlier that Estée Lauder was nearing a deal with Tom Ford.

Estée Lauder fell 3.3 per cent to close at US$220.67 in New York trading on November 14, giving the company a market value of about US$79 billion.

Tom Ford, a 61-year-old Austin, Texas native, started his namesake company in 2005, a year after leaving Gucci, which he revitalised during a decade-long stint as creative director. He also was creative director for the house of Yves Saint Laurent following Gucci’s acquisition in 1999.

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Fashion

Estée Lauder’s to-be-announced acquisition of Tom Ford would include licensing agreements of the brand’s eyewear and apparel business, said an inside source
The company’s suits were licensed by Ermenegildo Zegna Holditalia SpA until autumn/winter 2022, while its eyewear is produced and distributed by Italian label Marcolin SpA