The American luxury industry is not only utterly competitive but highly concentrated as well. Giants Estee Lauder announced earlier a framework that stretches the company's depth by buying Tom Ford.
Estee Lauder Cos Inc announced on Tuesday that it has reached an agreement to purchase the American luxury brand Tom Ford for $2.8 billion, which is the biggest move in the company's history. Although the market for luxury goods has remained stable, there are signs of gaps as some buyers tighten their funds in retaliation to decades-high inflation.
Estee Lauder will pay around $2.3 billion for the brand, funded by cash, debt, and $300 million in deferred payments, while the remaining $250 million will come from Marcolin SpA.
According to the firm, Ermenegildo Zegna NV will continue to be Tom Ford's long-term partner for accessories, lingerie, and men's and women's clothing. To pay creditors as a licensee, Zegna will purchase Tom Ford's fashion line.
After closure and through the end of 2023, Ford, the founder, will continue as its creative vision, while chairman Domenico De Sole will continue in that position.
The declaration comes after Bloomberg News' July report that Tom Ford was considering a sale. According to those with knowledge of the situation, Kering SA, which owns Gucci and has previously stated that it was interested in a transformational deal, also conducted discussions to acquire Tom Ford.
(Source - Instagram)