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Lauder Gets a Ford

A year after his departure from the Gucci Group, Tom Ford stepped back into the luxury goods world and a new era began for Estee Lauder.

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NEW YORK — Tom Ford and Domenico De Sole have Chanel and Hermès in their sights. The duo confirmed an exclusive report in WWD Tuesday that they were returning with a new company that will be totally self-financed. As reported, one of the first deals signed under the new Tom Ford brand is an agreement with the Estee Lauder Cos. to launch a Tom Ford for Estee Lauder collection and eventually a stand-alone Tom Ford beauty brand. While none of the parties involved would discuss terms of the Lauder deal, industry sources speculated that Ford could be paid a minimum of $10 million to $20 million over the next five years.

The designer also on Tuesday signed an agreement with Marcolin for a Tom Ford eyewear line.

Ford, who will be president and chief executive officer of the new company, hinted Tuesday that future product categories could include home goods and a men’s apparel line. He’s also continuing with his plans to enter the film business and said he has “a few” scripts in development.

De Sole, who will be chairman of the new venture, said the deals are the first steps in the founding of a new luxury conglomerate.

“We’re back, and these are the first steps in a bigger plan,” said De Sole. “We’ll be doing very specialized products [and are] thinking through more licenses and the possibility of directly owned stand-alone stores. The brand is going to be very high-end; and all of the products will be positioned at the level of Chanel and Hermès. We want to create the first, true luxury brand of this century. And, as always, we’re doing our own thing, developing our own business model. The process started last summer, and we’ve been looking at this brand from every angle and trying to see what fits and what doesn’t. We’re going to make this very big, but we’re going to build it slowly and at a deliberate pace.

“There is no outside capital at all in this [Tom Ford] venture, and we’re totally in control,” added De Sole. “We really wanted to do something for ourselves.”

This story first appeared in the April 13, 2005 issue of WWD.  Subscribe Today.

Ford, meanwhile, admitted that a year away from fashion, following the duo’s dramatic departure from Gucci Group, has given him a new perspective on the industry.

“It’s different when you’re not in it — it’s sort of refreshing to be able to step back and look at [the fashion world] from a different perspective. One of the things that may have surprised me the most is the realization — which I knew all along, but didn’t really realize until I stepped out of the business — that a lot of people just don’t care about fashion. They just don’t care. The consumers, the people who are in it, really care. But it’s a tight little clique of people almost performing for each other. And things that you think are so-o-o important — sometimes those messages don’t reach the consumer, or the consumer doesn’t notice, or the consumer doesn’t care. And that’s been very helpful to me in considering what I’ll do next, because I feel like I’ve had a real dose of real life by stepping away for awhile.”

When asked what he thinks is needed to cure the chaotic fragrance market, Ford replied: “Every forum right now needs quality. There’s so much flash right now, so many people endorsing things. Things are reaching sort of a hollow peak. Quality of product is number one. If I were designing ready-to-wear right now, that’s what it would be about — real, true value. And I don’t mean value for the price. I mean value in terms of quality. That’s what’s most important, and it’s what’s missing in every area.”

Added De Sole: “To put it very simply, the key issue in the launch of the Tom Ford brand is the fragrance. Perfume is a critical step for the long-term success of a designer. It made sense to do it. As for the eyewear, I’ve always loved it, and we had great success with it at Gucci. Tom Ford eyewear is going to be a big priority for Marcolin, and the product is going to be a beautiful interpretation of Tom’s aesthetic. And we’re doing it quickly. The eyewear will launch for the trade at the Paris Silmo fair in early 2006.”

De Sole added the two were still scouting for a space for the London design studio, and that Ford already was spending a “fair amount” of time in London, where he has a house. In fact, after announcing the Lauder and Marcolin agreements, Ford was scheduled to fly to London Tuesday night.

Asked if he felt Ford had lost any luster during his yearlong hiatus from work, De Sole said: “Not at all. I think his absence sort of enhanced his name in terms of expectation in the marketplace. His name is as strong as ever.”

In his deal with Lauder, Ford will become the first designer to be allied with the 58-year-old flagship brand. The multiyear arrangement calls for the creation of the Tom Ford for Estee Lauder collection of color cosmetics products, which will hit counters in December. The assortment, which also is meant to establish Ford’s beauty profile, will be distributed in the upper end — mostly specialty stores — of Lauder’s distribution.

The product assortment will be widened for spring and will pave the way for the advent of the freestanding Tom Ford brand within the Lauder corporation in fall 2006. Initial plans call for Ford to launch a women’s fragrance as part of his own brand. Ford will work closely with John Demsey, global president of the Estee Lauder brand; Aerin Lauder, its senior vice president of global creative directions, and senior creative consultant Doug Lloyd.

Ford’s participation with Lauder was portrayed Tuesday as both an alliance and a catalyst for the next step in the iconic brand’s evolution.

“The Estee Lauder brand is not just about Estee Lauder the person,” said William Lauder, ceo of the Estee Lauder Cos. and a grandson of its namesake. “It represents a lifestyle. And Estee Lauder as a brand represents the ultimate in an aspirational style. I think that Tom Ford is one of the early 21st century’s stylemakers. He represents an ideal — he has a taste level, and the association between our two brands represents the next phase in the evolution of the Estee Lauder lifestyle and its aspirational image.”

Added Demsey: “We’re not looking to use Tom Ford for shock value. This is not a stunt. It’s not an attention-grabber. This is a synergistic move which will work well with the DNA of the brand.” And he emphasized that the Ford limited-edition collections will set a new level of expectation for the Lauder consumer.

“We’re building a frame that can live beyond Tom Ford,” Demsey said. “This is not a singular act. It’s important to understand: We’re extremely excited by this collaboration, we’re going to put all of our creative talent and resources behind this, but this is one of many moves that you’ll begin to see taking place against the Lauder brand to continue its evolution. We’re making moves here. Aerin is making dramatic shifts in terms of the creative end of the brand, we’re making moves relative to products, we’re making moves toward category, to the executive structure of the brand. This is a new team.”

Aerin Lauder, who said that her grandmother would have “loved” Ford, noted that there are a number of similarities between the fashion icon and the beauty icon. “There are a lot of similarities between Estee and Tom, if you think about it,” she said. “The lifestyle; being provocative and unexpected; image and style. They both have really lived the American dream, to some extent. There is something very similar about the two — the drive, the passion. They really understand what the consumer wants and how to make everything they touch desirable.”

For his part, Ford insisted that he has long admired the Estee Lauder brand. “I have so many memories of it. I think most people who grew up in America do,” he said. “My grandmother wore Youth Dew until the day that she died. I remember having a crush on Karen Graham in the Seventies — she was really the woman for me — and Aramis men’s bronzer revolutionized my life as a teenager. I could be tan year-round!”

Ford confessed that he first became acquainted with Demsey when leading the Gucci Group. “John and I met because I tried desperately to steal him seven years ago when we bought YSL Beaute,” Ford said with a laugh. “And I wasn’t able to succeed. And of course I’ve known Aerin for quite a few years and I’ve wanted to work with Aerin. Aerin, for me — aside from being a great businesswoman — is also really my ideal woman. She’s so beautiful, so chic, so smart. She’s so intelligent, and is really the ultimate customer. So this is really something that I’ve wanted to do for a long time.

“I’m very good about working within a framework and with a brand that has a certain history — I tend to respect that,” Ford continued. “Estee Lauder is Estee Lauder. I’m not redoing the entire brand — I’m doing a collection, Tom Ford for Estee Lauder [and then his own branded line]. I like pushing the boundaries [of an existing framework]. It’s not like starting something from scratch, which I also like. All of a sudden, I’m having to think, ‘What am I about as my own brand?’ I like having the framework of an existing brand, and a history, and understanding that you don’t want to stray too far from that, but at the same time, you want to create something new that means something to the customer, so I’m really looking forward to it.”

While Ford is known for his racy, sexually overt advertising — take, for instance, the full-frontal nudity in the M7 men’s fragrance ad for YSL Beaute — he suggested that his approach also will evolve.

“At Lauder, I may certainly hint at a little bit of provocation, but I do have respect for what the Lauder brand is and stands for and who the customer is,” said Ford. “[The advertising] may be slightly more provocative, but it won’t be provocative to the point of near pornography.”

Still, he’s Tom Ford and provocation is in his blood.

“The real provocative advertising, I think, will happen when the freestanding Tom Ford brand is launched,” continued Ford. “It really will be 100 percent my character. I’m in a different place than I was when I started working with Gucci 11 or 12 years ago. The world’s in a different place — sensuality rather than sexuality. However, it’s in my nature to be provocative, I suppose. I think that sexy is what I’m known for, and probably what I do best.”

Demsey intends to use Ford’s participation with the brand in several ways. “Tom, working closely in collaboration with Aerin, is a wonderful way to reach back into the deep, rich history of the brand — and to create an architecture, where, if this is successful, to use as a platform to do other things even beyond this.”

The two-tiered Ford beauty strategy, Demsey explained, will give us “an extraordinary opportunity to establish Tom’s roots firmly in the beauty category.” First will come the Tom Ford for Estee Lauder collection, likely a limited color cosmetics selection, expected in 250 to 300 specialty stores — the brand’s top-tier distribution — by December. In the spring, a wider array of products, including what Demsey called “collectibles,” will bow in slightly wider distribution. By fall 2006, the stand-alone Tom Ford beauty brand, with first a women’s fragrance and then a men’s one, will be rolled out in a to-be-determined lineup of stores.

“I’m wearing something today that I think we’re going to start working on,” said Ford of his fragrance projects. “It was mixed for me a few years ago by a perfumer in Paris. It will be the base for the first Tom Ford men’s fragrance, which will be launched after the Tom Ford women’s fragrance. Again, it’s sensual. Fragrance is something that’s close to the body, close to the skin. I think that it should have a certain sensual quality. And you shouldn’t smell it until you get somewhat close.”

Still, Wall Street analysts are playing it cool when it comes to evaluating the impact the deal will have on the company’s bottom line.

“Until we know what the timing’s going to be, what the breadth of the line is going to be, how many sku’s, the price points — it will be impossible to figure out the dollar impact this will have,” said John Faucher, an analyst for J.P. Morgan.

“This is not much more than a licensing deal,” said Linda Bolton Weiser, a senior analyst for Oppenheimer & Co. “We made no changes to our earnings estimates based on this. We’re hopeful, but we don’t expect a financial impact on Estee Lauder. Even the Kohl’s deal is $100 million to $150 million in sales for Estee Lauder, but it still isn’t impacting on earnings.”

— With contributions from Samantha Conti, London, and Amy S. Choi

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