What does the Tom Ford deal mean for Ermenegildo Zegna? The Italian luxury house will take over fashion operations after Estée Lauder Cos.’ multibillion-dollar deal

Tom Ford, the upscale luxury fashion brand, has been acquired by Estée Lauder Cos. for US$2.8 billion and Ermenegildo Zegna NV will take control of the Tom Ford fashion operations. Photo: AFP
Ermenegildo Zegna NV will take control of the Tom Ford fashion operations as part of Estée Lauder Cos.’ acquisition of the company, as the Italian luxury house looks for ways to fuel its expansion in the US.

As part of the deal announced on November 15, Zegna will buy the 85 per cent of Tom Ford International it does not already own, according to people familiar with the transaction, who asked not to be named discussing confidential deliberations.

A Tom Ford store stands on Madison Avenue in Manhattan on November 16, in New York City. Photo: AFP

The business includes contracts for designers and other employees, leases for retail stores, and other assets and liabilities that underpin the fashion operations, some of the people said. Estée Lauder is buying the Tom Ford brand and its intellectual property.


Zegna declined to comment. A representative for Tom Ford referred questions to Estée Lauder, whose spokeswomen didn’t respond to multiple requests for comment.

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A strategic move

Tom Ford attends The 2022 Met Gala Celebrating “In America: An Anthology of Fashion” at The Metropolitan Museum of Art in New York City, on May 2. Photo: AFP

The move gives Zegna a complementary fashion marque to expand its business internationally and provide it with a new customer base. Zegna already owns the Thom Browne brand, and its CEO Ermenegildo Zelda has said he wants to expand further in the US following the company’s New York listing last year.

It could also help Zegna realise his ambition of transforming his family’s 112-year-old men’s clothing company into a bigger, more modern, high-end global brand.

The ties between the two sides date back more than 15 years. Zegna has worked with company founder Tom Ford since he started his namesake business after leaving Italian fashion brand Gucci, which he revitalised during a decade-long stint as creative director. Zegna is also a Tom Ford International board member, while Tom Ford chairman Domenico De Sole sits on Zegna’s board.

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License deal

Zegna artistic director Alessandro Sartori (left) at the end of the Zegna Men’s spring/summer 2023 collection presented in Trivero in Northern Italy, on June 20. Photo: AP

Under the terms of the acquisition announced Tuesday, Tom Ford will extend and expand its license with Zegna for men’s and women’s fashion, accessories and similar products for at least another 20 years.


Zegna said it will “acquire the fashion operations necessary to perform its obligations as licensee” but didn’t comment on the acquisition of the entire fashion business.

Zegna didn’t disclose the price of the license transaction, which it will finance with cash on hand and which it said will be accretive to earnings per share for Zegna shareholders within the first full year after closing. Zegna had about US$363 in cash and cash equivalent at the end of June.

Estée Lauder products. Estée Lauder just acquired Tom Ford in a multibillion-dollar deal. Photo: Estée Lauder

Estée Lauder will pay about US$2.3 billion for the Tom Ford brand and all its intellectual property in a deal funded by cash, debt and US$300 million in deferred payments, with US$250 million coming from eyewear manufacturer Marcolin SpA, whose existing license with Tom Ford will be extended.

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The announcement of the deal follows a July report by Bloomberg that Tom Ford was exploring a potential sale. Gucci owner Kering SA, which had long expressed interest in a transformational deal, also held talks to acquire Tom Ford, people familiar with the matter said. A Kering representative declined to comment.

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  • Beauty giant Estée Lauder acquired Tom Ford for US$2.8 billion, with Ermenegildo Zegna NV taking control of the fashion operations as the Italian luxury brand looks for ways to expand in the US
  • The 112-year-old men’s clothing company already has ties with Tom Ford: Zegna worked with Ford since he started his namesake business after leaving Gucci