After much speculation, Estée Lauder has signed an agreement to acquire the Tom Ford brand in a transformational deal that will establish its longstanding partner as the sole owner of the brand and all its intellectual property.
WHO: In April 2005, Tom Ford announced the creation of the Tom Ford brand. Ford was joined in this venture by former Gucci Group President and Chief Executive Officer Domenico De Sole, who serves as Chairman of the company. In that same year, Ford announced his partnership with Marcolin Group to produce and distribute optical frames and sunglasses, as well as a partnership with Estée Lauder to create the Tom Ford Beauty brand.
In April 2007, Ford's first directly owned flagship store opened in New York on Madison Avenue, which coincided with the debut of Tom Ford menswear and accessory collections. In September 2010, during an intimate presentation at his Madison Avenue flagship, Ford presented his highly anticipated womenswear collection. In February 2018, Ford debuted Tom Ford timepieces and the much-anticipated underwear collection for the first time on the runway.
Today, the brand offers a complete collection of menswear, womenswear, accessories, eyewear, beauty and, most recently, underwear and timepieces. Presently there are over 100 freestanding Tom Ford stores and shop-in-shops in locations.
WHY: Estée Lauder benefits include securing the long-term cash flow from owning the fast-growing Tom Ford Beauty brand beyond the existing license expiration in 2030 and eliminating royalty payments on beauty upon closing, as well as new licensing revenue streams and other anticipated synergies. These synergies include creative oversight, increased speed and agility, and opportunities for further online penetration.
Estée Lauder edged out luxury conglomerate Kering in the deal, which was defensive in nature. If Kering or another company had taken over the brand, Estée Lauder ran the risk of losing the Tom Ford Beauty license and the substantial revenue attached.
IN THEIR OWN WORDS: 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," said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies.
"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."
Tom Ford states, "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."
"We are committed to driving the continued success of Tom Ford Beauty, and this exciting acquisition strategically positions us for future growth," said Guillaume Jesel, President, Luxury Business Development, The Estée Lauder Companies. "Tom Ford is a true visionary and the ultimate architect of luxury. Together with the legendary Domenico De Sole, they have created a remarkable new world of luxury. It is an honor to continue to lead the brand and the exceptionally talented team, and manifest Tom Ford's extraordinary vision of luxury beauty and beyond."
"We have been partners and shareholders of the Tom Ford fashion business since its inception. This transaction is the first since our listing in December 2021, and confirms our commitment to leverage our platform to create value for all of our stakeholders," said Ermenegildo "Gildo" Zegna, CEO of Ermenegildo Zegna Group. "We have been so inspired by the incredible talent at Tom Ford and are delighted to embark on this powerful and enriching relationship with The Estée Lauder Companies."
TRIBE DYNAMICS EMV: Tom Ford Beauty’s $8.6MM EMV haul in Q4 proved a 15% QoQ improvement. Despite a 1% QoQ contraction to the brand’s community of 1.3K creators, Tom Ford Beauty saw a 12% QoQ boost to its content volume, closing Q4 with 3.8K posts. Much of this momentum stemmed from fashion blogger and brand advocate Jihoon Kim (@jihoonkm on Instagram), who ranked as Tom Ford Beauty’s top earner after not mentioning the brand in Q3. Jihoon powered $325.5K EMV across 27 mentions, most of which stemmed from a Moroccan getaway sponsored by Tom Ford. While Jihoon demonstrated the impact of incoming ambassadors, the brand also enjoyed increased content creation amongst its consistent population: after driving $4.7MM EMV in Q3, the same cohort delivered $5.5MM in Q4.
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