The Estée Lauder Companies had confirmed the $2.8 billion (£2.2 billion) purchase of the Tom Ford fashion and beauty empire with the celebrated designer remaining at the helm until the end of 2023.
In what it has described as a “transformational deal”, the New York-based beauty conglomerate has taken full ownership of the Tom Ford brand and intellectual property and has entered into long-term agreements with existing licensees Ermenegildo Zegna and Marcolin to produce the brand’s ready to wear and eyewear respectively.
The Estée Lauder Companies (ELC) has been creating beauty and fragrance for the Tom Ford brand since 2006 when the Texan designer branched out under his own name, having previously been creative director at Gucci and Yves Saint Laurent.
The group said that the extension of the existing licensing agreements would provide continuity for the brand while also allowing for “further evolution” to position it as “one of the preeminent luxury brands of the 21stCentury”.
ELC will pay $2.3 billion in cash for the brand while Marcolin will pay it $250 million upon closure of the deal. A further $300 million will be made in deferred payments to the sellers becoming due beginning July 2025.
The group said it would benefit from the positive cashflow to be gained from retaining ownership of Tom Ford Beauty beyond the existing licensing agreement, which was due to expire in 2030, as well as the elimination of royalty payments upon completion of the purchase.
As well as Tom Ford remaining at the helm until the end of 2023, his long-term business partner and chairman of the business Domenico De Sole, will act as a consultant for the brand until that point.
“I could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand. They have been an extraordinary partner from the first day of my creation of the company and I am thrilled to see them become the luxury stewards in this next chapter of the Tom Ford brand.
“Ermenegildo Zegna and Marcolin have been spectacular long-standing partners as well and I am happy to see the preservation of the great relationship that we have built over the past 16 years. With their full commitment, I trust they will continue the brand’s future as a luxury company that strives to produce only the highest quality fashion and eyewear,” Tom Ford said.
Domenico De Sole added: “I am delighted with this acquisition. I view The Estée Lauder Companies, the first partner in our Tom Ford journey, as the trusted party to continue the extraordinary legacy of the Tom Ford brand. I thank Tom for his magnificent vision and leadership, and our amazingly talented Tom Ford team for their hard work and commitment to the brand.”
The Estée Lauder Companies CEO Fabrizio Freda said: “We are incredibly proud of the success TOM FORD BEAUTY has achieved in luxury fragrance and makeup and its dedication to creating desirable, high-quality products for discerning consumers around the world.
“As an owned brand, this strategic acquisition will unlock new opportunities and fortify our growth plans for TOM FORD BEAUTY. It will also further help to propel our momentum in the promising category of luxury beauty for the long-term, while reaffirming our commitment to being the leading pure player in global prestige beauty.”