The Estée Lauder Companies Inc. is in talks to acquire Tom Ford, the conglomerate appears to have selected a new luxury brand to turn into a beauty giant. The company is in the final stages of ironing out a licensing deal to produce a beauty line for Balmain. The arrangement is said to be similar to the conglomerate’s venture with Tom Ford, a partnership that started with a single fragrance in 2006 and quickly expanded to become one of Lauder’s top brands.
The Tom Ford Beauty partnership started with Black Orchid before quickly expanding into makeup and has become one of Lauder’s top brands, with close to $1 billion in revenue last fiscal year. In August, The Wall Street Journal reported that Estée Lauder was negotiating to buy the Tom Ford brand outright, at a valuation of $3 billion or more.
Estée Lauder likely has similar aspirations for Balmain. Like Ford, the brand’s fashion business is relatively small compared to luxury giants but enjoys outsized name recognition with consumers, who love to look at the label’s expensive, flashy clothes and accessories even if they can’t afford to buy them. The timing couldn’t be more ideal for Lauder to try and replicate the formula that turned Tom Ford into a multi-billion-dollar business.
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