In a significant development in the fashion industry, French luxury conglomerate Kering is reportedly in advanced discussions to acquire American fashion brand Tom Ford. According to insiders, Kering is currently competing with other major players like Estée Lauder to secure the iconic brand. However, Kering appears to have taken the lead in the negotiations, and a deal could be imminent. Although Kering has not officially confirmed the acquisition, Estée Lauder was previously engaged in talks to purchase Tom Ford, with the potential deal value rumored to have exceeded $3 billion. It is believed that the current market conditions, including geopolitical tensions and inflation, may have influenced the acquisition price.
Notably, Estée Lauder recently disclosed disappointing results for its first quarter, characterized by declining sales and reduced net profits. The company faced challenges due to lockdown restrictions in China and a slowdown in orders from U.S. retailers. In stark contrast, Kering has witnessed a remarkable surge in sales following the pandemic, primarily driven by the success of its luxury brands such as Gucci, Saint Laurent, and Balenciaga. Despite rising inflation, affluent consumers have continued to splurge on luxury goods, bolstering Kering’s financial performance. With an impressive market value of nearly 60 billion euros, Kering appears to have the financial capacity to make the acquisition of Tom Ford a feasible and attractive opportunity.
Founded in 2005 by the renowned designer of the same name, Tom Ford is renowned for its exceptional menswear offerings. However, the brand also showcases an extensive range of womenswear, accessories, cosmetics, and fragrances. Before launching his eponymous label, Tom Ford gained widespread recognition as the creative director of Gucci from 1994 to 2004. Notably, Estée Lauder has displayed interest in Tom Ford’s beauty division due to their longstanding licensing agreement. Nevertheless, a potential deal with Kering could provide Tom Ford with more strategic advantages. Leveraging Kering’s expertise in high-end fashion and accessories, Tom Ford could potentially expand and enhance its women’s accessories business.
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