According to a press release from The Estée Lauder Companies, the combined worth of the two companies is USD 2.8 billion, and the former will purchase the latter, the global luxury brand Tom Ford.
Tom Ford and ex-Gucci Group President and CEO Domenico De Sole created the brand in 2005, and shortly after, they inked a license agreement making Estée Lauder a long-term partner in beauty for the company.
Through this transaction, ELC will be able to eliminate royalty payments and ensure a steady stream of revenue from the rapidly expanding Tom Ford Beauty brand beyond the expiration of the current license in 2030.
This contract would cement Tom Ford’s lengthy partnership with Ermenegildo Zegna and grant the latter an exclusive, long-term license to produce Tom Ford-branded clothing, accessories, and underwear for both men and women. To fulfill its role as licensee, Zegna is acquiring the Tom Ford fashion business’s operations. To maintain the premium image of the Tom Ford brand, ELC and Zegna will coordinate closely on future aesthetic decisions.
In addition, Marcolin, one of the world’s foremost producers of eyewear, will retain a significant portion of the brand’s present license.
Tom Ford, Chairman and Chief Executive Officer of Tom Ford International, will stay on as the company’s creative director until the end of the calendar year 2023 under the terms of the agreement. Until then, Domenico De Sole will continue to serve as a consultant for the company.
Tom Ford Beauty is well positioned to benefit from the anticipated outperformance of the luxury fragrance and makeup categories over the next years.
“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 CEO of The Estée Lauder Companies.
