The Estée Lauder Companies is breaking into the fashion industry, announcing it has acquired Tom Ford in a deal worth US$2.8B (NZ$4.5B).
The deal sees the US-based beauty giant take control as the sole owner of the Tom Ford brand and all its intellectual property.
The deal will make fashion designer, film maker and influential industry figure Ford a billionaire, according to the Bloomberg Billionaires Index.
Estée Lauder has been responsible for the creation of Tom Ford’s high-end makeup, fragrance and skincare lines since 2006 under license and helped grow beauty into a successful element of the overall business.
The beauty arm started with Ford’s wildly popular Black Orchid perfume, created in 2006 and still a best-seller.
Now, it will take sole ownership of the beauty brand and also gain ownership of the fashion and eyewear business as well.
However, according to a statement announcing the deal, day to day operations of the fashion business will be carried out by Ermenegildo Zegna Group under a long-term license agreement, and the eyewear arm will continue to be carried out by current license holder Marcolin. The Italian eyewear manufacturer has been the eyewear licensee since 2005, while Zegna has had the license for Tom Ford menswear since around 2006. Now, it will be responsible for all of Tom Ford’s fashion business.
Ford, 61, launched the Tom Ford brand in 2005 and grew it into a luxury clothing and accessories powerhouse, and will stay on as the brand’s “creative visionary” until the end of 2023, the statement revealed.
Ford’s longtime business partner, Domenico De Sole, will stay on as a consultant until that same time. The purchase, subject to regulatory approvals, is expected to close in the first half of 2023.
Two cream formula eye shadow quads in Violet Satine (L) and Velours Kaki (R) and woody amber scent Ébène Fumé are among Tom Ford Beauty’s latest releases.
“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,” Estée Lauder said in the statement.
“I could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand,” Ford said in addition.
“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.”