Estée Lauder Is Set to Buy Tom Ford for $2.8 Billion, According to Reports
Tom Ford (the brand) may have finally found its new owner.
Cosmetics company Estée Lauder has succeeded in the auction to buy the fashion heavyweight’s namesake business in a deal valued at roughly $2.8 billion, sources have told The Wall Street Journal. The sale has been highly anticipated since August, when Ford made headlines for teaming up with Goldman Sachs to create a valuation of his namesake company. Estée Lauder quickly became a front-runner in the race. Gucci’s parent company, and Ford’s former employer, Kering later entered advanced talks for the sale, but those don’t seem to have panned out.
More from Robb Report
The deal could be officially announced on Tuesday, so long as there are no last-minute hiccups, reports WSJ. And because Ford and Estée Lauder have been working together since 2005, when he launched his label, we’d imagine 17 years of partnership have prepared both sides for the transaction. Ford began his relationship with the company as a consultant, and shortly afterward Estée Lauder signed him on to begin developing and distributing scents and cosmetics under the Tom Ford brand name. By no surprise, Ford’s high-end offerings from their partnership have performed exceedingly well.
While Kering’s incentive to buy Ford’s company may have sought to further elevate its glamorous apparel and accessories, Estée Lauder’s interest in the Tom Ford beauty business might have tipped the scales in its favor. Kering is the renowned parent company of top brands like Gucci (where Ford was once creative director) Balenciaga, Saint Laurent and Brioni. It reportedly has a market value of $60 billion. Estée Lauder’s market cap, however, was $78 billion as of November 11.
The New York-based cosmetics company is well known for its portfolio of skincare products, fragrances and makeup produced by brands including Origins, Lab Series, Le Labo and La Mer. Tom Ford would be its biggest acquisition and the first clothier in its stable of brands. On a fiscal third-quarter earnings call in May, Estée execs confirmed that Tom Ford Beauty was among a handful of brands with double-digit sales growth. Now that the acquisition is expected to move forward, they could potentially venture outside of beauty and into new lanes such as licensing the brand’s clothing lines.
Either way, it smells like a good match.
Best of Robb Report
Sign up for Robb Report's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
Solve the daily Crossword
