Estée Lauder Acquires Tom Ford For $2.8 Billion Dollars

Words Bethany Boyo

Shutterstock

After many months and a lot of speculation, Estée Lauder Cos Inc has announced that it has officially acquired Tom Ford in a deal worth $2.8 million. The beauty giant takes a bold step into the world of luxury by not only acquiring Tom Ford Beauty, but also eyewear and the brands' ready-to-wear department, which will be produced under the licence of Ermenegildo Zegna Group, which also owns Thom Browne.

Estée Lauder believes that this deal will provide a broader creative oversight it needs for Tom Ford Beauty, whilst increasing its speed and agility and bringing more opportunities to enhance its space online. The company will also benefit from the cash flow Tom Ford Beauty will bring at a time when Estée says U.S. retailers are cutting stocks of its products due to a worrying slowdown in demand and lockdowns in China. The company also aims to eliminate the need to make royalty payments, which will open up new licensing revenue streams.

Whilst Estée Lauder is already known for selling Tom Ford Beauty, stating that it has “delivered impressive success”, including growing strong double-digit net sales from fiscal years 2012 through 2022. Some in the industry question whether the company has the ability to do the same for Tom Ford eyewear and ready-to-wear.

After rising to fame at Gucci in the 1990’s, he moved on to become Creative Director at Yves Saint Laurent in 1999. Ford founded his eponymous brand in 2005, building it up to world renowned status. He believes that in the hands of Estee Lauder the brand will continue to thrive. “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,” said Ford in a statement. Ford will continue as ‘creative visionary’ at the brand until the end of 2023, whilst Domenico Del Sol will stay on as chairman of the brand.