Estée Lauder said Tuesday it clinched a deal to purchase fashion label Tom Ford for $2.8 billion in what could be its biggest acquisition.
The deal will help Estée beef up its luxury offerings at a time when demand for high-end apparel and accessories stays resilient despite record inflation within the US.
Founded by dressmaker Tom Ford in 2005, the luxurious brand is understood for its menswear, but additionally counts women’s apparel, handbags, cosmetics and perfumes as a part of its product line.
The deal is the most recent in a series of acquisitions by Estée Lauder, including taking full control of Strange skincare brand owner Deciem last yr for about $1 billion.
As of Tuesday’s close, the Estée stock fell 17% because the deal talks with Tom Ford were reported by the Wall Street Journal for the primary time in August.
Tom Ford, above, founded his label in 2005.Getty Images
Tom Ford had entered into exclusive negotiations with Estée Lauder last week, beating competing bids from firms including Gucci owner Kering, the Financial Times reported on Friday.
Shares of Estée Lauder, which already licenses Tom Ford fragrances and cosmetics, fell marginally in prolonged trading.
Estée expects to fund the transaction through a mixture of money, debt and $300 million in deferred payments to sellers that turn out to be due starting in July 2025, the corporate said.