The Estée Lauder Companies Inc. has announced that it has signed an agreement to acquire the TOM FORD brand, a global leader in luxury. The transformational deal will establish its longstanding partner, The Estée Lauder Companies (“ELC”), as the sole owner of the TOM FORD brand and all its intellectual property.
Under the stewardship of ELC, the purchase of the TOM FORD brand and the extension of its current licensing partners will allow for continuity and the further evolution of the TOM FORD brand as one of the preeminent global luxury brands of the twenty-first century.
The deal values the total enterprise at $2.8 billion. The amount to be paid by ELC for the acquisition is approximately $2.3 billion, net of a $250 million payment to ELC at closing from Marcolin S.p.A. (“Marcolin”). ELC expects to fund this transaction through a combination of cash, debt, and $300 million in deferred payments to the sellers that become due beginning in July 2025.
TOM FORD BEAUTY, first introduced by ELC in 2006, is an iconic luxury beauty brand with a highly differentiated collection of fragrance, makeup, and skin care that reflects Tom Ford’s singular vision of modern glamour, crafted with ultimate quality. Established with an initial luxury fragrance, TOM FORD BEAUTY has since grown into one of the most successful and aspirational beauty brands in the world.
“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.He added that. “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 BEAUTY is strongly positioned in the luxury fragrance and makeup categories, areas that are expected to outperform industry growth over the coming years. This strategic acquisition supports the next level of growth for TOM FORD BEAUTY in key markets for luxury and online channels globally. The brand has delivered impressive success, including growing strong double-digit net sales on a compound annual basis from fiscal years 2012 through 2022.
In ELC’s fiscal year ended June 30, 2022, TOM FORD BEAUTY achieved nearly 25% net sales growth as compared to the prior year, and over the next couple of years, we expect that the brand will achieve annual net sales of one billion dollars. The brand continues to have strong momentum across channels and key markets resulting in a prestige fragrance ranking in the top 15 in the United States and top 10 in China. The brand has received over twenty awards from The Fragrance Foundation.
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.”
Domenico De Sole, co-founder and Chairman of TOM FORD INTERNATIONAL said, “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.”
“We are honored that Tom Ford has been part of our ELC family for more than fifteen years, from our first collaboration with the Estée Lauder brand to the launch of TOM FORD BEAUTY and through its most recent successes,” said William P. Lauder, Executive Chairman, The Estée Lauder Companies. “ELC and TOM FORD share a deep appreciation for luxury, creativity, entrepreneurial spirit, and a commitment to excellence, and above all, the extraordinary talent that fuels our businesses.”
“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.”