Ermenegildo Zegna to take management of Tom Ford style operations as a part of Estée Lauder Cos.’ acquisition of the corporate because the Italian luxurious home appears to be like for methods to gas its US growth.
As a part of the deal introduced Tuesday, Zegna will purchase the 85 p.c of Tom Ford Worldwide it does not already personal, in accordance with individuals accustomed to the deal who requested to not be named to debate confidential deliberations.
The enterprise contains contracts for designers and different staff, leases for retail shops and different belongings and liabilities underlying style operations, a number of the individuals stated. Estée Lauder buys the Tom Ford model and its mental property.
Zegna declined to remark. A consultant for Tom Ford referred inquiries to Estée Lauder, whose spokespeople didn’t reply to a number of requests for remark.
The transfer provides Zegna a complementary style model to increase its enterprise internationally and supply a brand new buyer base. Zegna already owns the Thom Browne model, and chief government Ermenegildo Zegna has stated he desires to increase additional within the US after the corporate listed in New York final 12 months.
It might additionally assist Zegna notice his ambition to remodel his household’s 112-year-old menswear firm into a much bigger, extra fashionable and cutting-edge international model.
The ties between the 2 events date again greater than 15 years. Zegna has labored with firm founder Tom Ford since beginning his eponymous enterprise after leaving Italian style model Gucci, which he revitalized throughout a decade as artistic director. Ermenegildo Zegna is a board member of Tom Ford Worldwide, whereas Tom Ford chairman Domenico De Sole sits on Zegna’s board.
License Settlement
Beneath the phrases of the acquisition introduced Tuesday, Tom Ford will increase and prolong its license with Zegna for males’s and ladies’s style, equipment and associated merchandise for a minimum of one other 20 years.
Zegna stated it might “purchase the style operations essential to satisfy its obligations as a licensee,” however didn’t touch upon the acquisition of the whole style enterprise.
Zegna didn’t disclose the value of the licensing deal, which it should finance with money available and which it stated could be accretive to earnings per share for Zegna shareholders within the first full 12 months after closing. Zegna had about 350 million euros ($363 million) in money and money equivalents on the finish of June.
Estée Lauder pays about $2.3 billion for the Tom Ford model and all of its mental property in a deal financed by money, debt and $300 million in deferred funds, with $250 million coming from the eyewear maker Marcolin, whose current license with Tom Ford shall be prolonged. .
The deal announcement follows a July report by Bloomberg that Tom Ford was exploring a possible sale. Gucci proprietor Kering, which has lengthy expressed curiosity in a turnaround deal, has additionally held talks to purchase Tom Ford, individuals accustomed to the matter stated.
A Kering consultant declined to remark.
