Licencing Deals, Estee Lauder Getting Close to Tom Ford

Quote Bloomberg, Tom Ford transaction could be announced as soon as Tuesday(Tomorrow).

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It has been reported since early July that Tom Ford is looking for a sale. Estee Lauder is a long-term licensee to the brand's beauty and fragrance products, and has been in communication with Tom Ford for a long time.

Also in the running is Kering Group, which even last week, the Wall Street Journal said, citing sources familiar with the matter, was then in talks with Tom Ford about a takeover. The negotiation advantage ahead of Estee Lauder.

However, the latest news is that Estee Lauder Group finally won, offering $2.8 billion, beating out many bidders, including Kering Group. It also means that Tom Ford's fine apparel and accessories business will also be integrated into the Estee Lauder Group.

The deal could be announced as early as tomorrow, Bloomberg reported. This transaction will also become the largest one in the history of Estee Lauder Group, surpassing the increase of its holding of DECIEM, the parent company of The Ordinariy, by 1 billion dollars in 2021.

With the net sales of Estee Lauder falling by 11% in the first quarter of fiscal year 2023, Tom Ford perfume achieved double-digit growth, and new perfume and classic perfume both showed outstanding performance.

Although some insiders speculate that the acquisition of Tom Ford brand will be the beginning of Estee Lauder's further march into the fashion industry and development of luxury product line, there is no doubt that the overall focus of Estee Lauder Group is still beauty and skin care.

This is also evidenced by the cooperation between Estee Lauder Group and Balmain, a French luxury brand. On September 26, Estee Lauder officially announced that it had signed a contract with Balmain Balman to jointly develop, produce and distribute a series of beauty products. According to the official website of Estee Lauder, the beauty product jointly launched by Estee Lauder and Balmain is named "Balmain Beauty" and is expected to launch the first beauty line in the autumn of 2024.

In the organizational structure updated by Estee Lauder in September, Balmain Beauty and Tom Ford Beauty may form a new growth pole of perfume of Estee Lauder Group together. Guillaume Jesel, President of Tom Ford Beauty Global Brand, was appointed as the Global President of Tom Ford Beauty, Balmain Beauty, and Luxury Business on the official announcement day of Balmain Beauty, and was responsible for the overall strategic direction of the two brands in the future.

Its beauty range is believed to have performed especially well in China, a key growth market for both businesses.

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