KERING IN TALKS TO ACQUIRE TOM FORD
KERING, ONE OF THE MEGA PARENT HOUSES OF LUXURY FASHION IS IN ADVANCED TALKS TO ACQUIRE AMERICAN LABEL TOM FORD
Tom Ford was the former creative director of Gucci and Yves Saint Laurent and the founder of his namesake brand. Should Tom Ford be sold to Kering, it would be a full-circle moment for the founder and designer.
Tom Ford is one of the few independent stand-alone brands, not under any parent umbrella. Although the brand does have exclusive partnerships. Notably with Estee-Lauder for their line of fragrances. Its eyewear is licensed to Marcolin SpA, although this is due to expire shortly, according to UBS.
KERING AND TOM FORD
The French luxury conglomerate Kering has said to be competing with Estée Lauder to acquire the brand. While both people for Tom Ford and Goldman Sachs have declined to make any official statement on the rumour. Although the more interesting question would be if Ford himself would stay on in any capacity once and if the sale goes through.
Business of Fashion reports that Tom Ford has been shopping for a possible sale since this summer. Back in August, Estée Lauder was also reported to be talking about buying the brand in a deal valued at USD 3 billion. Kering also has a strong balance sheet, with Bloomberg Intelligence estimating a net cash position in the year ahead, so it could easily afford the mooted $3 billion price tag.
Kering posted a year-over-year sales growth of 14%, driven by booming consumer demand for Saint Laurent. However, Kering’s post-pandemic performances have lagged behind competitor LVMH, which saw an increase of 22% in its fashion and leather goods in the same quarter. Tom Ford is not the first brand Kering has been eyeing an M&A opportunity. In 2018, it pursued Versace and in the past, it has also reportedly explored deals with Prada and Moncler.
Kering has made no secret of its desire to develop Gucci’s beauty business, which is currently licensed to Coty Inc. It has set up an internal team to evaluate its options in the sector. If Tom Ford were a stepping stone to building critical mass in cosmetics and fragrance, then the complexities and expense of acquiring the license would be worth it.
Perhaps the two companies could agree, whereby Kering takes Tom Ford’s fashion while Estee Lauder takes the cosmetics and fragrance business. Or they could partner on beauty. Cosmetics houses are used to working with brands and celebrities on a licensed basis, and there might be scope for Kering to eventually buy out its partner.
Overall it might prove to be the push Kering needed after their decline in numbers, with the underwhelming performance of their current brands post-pandemic.
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