Kering reported to be in talks to acquire Tom Ford

Kering, the Paris-based luxury conglomerate, is reported to be in talks to acquire the Tom Ford fashion and beauty empire.

Shares in the group, which owns the likes of Gucci, Alexander McQueen and Saint Laurent, rose this morning on the back of the speculation which followed a report in the Wall Street Journal.

American designer Tom Ford appointed Goldman Sachs to explore a potential multi-billion sale of his business in July of this year. The former creative director of both Gucci and Saint Laurent established his own label in 2005. It is understood that any purchaser would have the right to continue to work with Ford.

The brand is as well known in beauty and fragrance as it is in fashion after Ford established a partnership with Estée Lauder to launch his beauty business alongside his fashion label in 2005.

Estée Lauder Companies is believed to have been in talks to acquire the brand, which would have been its biggest acquisition to date and its first in fashion, but the latest reports suggest that Kering is now the front-runner particularly after Estée Lauder published disappointing results this week in which it reported an 11% drop in Q1 net sales to £3.4 billion.

Kering on the other hand is performing well – earlier this month it reported Q3 group revenue up 23% to £4.48 billion – as luxury consumers prove to be more resilient during the cost of living crisis and may be better placed to take on the business, which is believed to carry a price tag of $3 billion.

There is no certainty that either company, or anyone, will land the deal at this stage and Ford is understood to be reserving the right to remain an independent brand. However a deal with Kering would appear to make greater strategic sense, given its expertise in fashion. There had been an expectation that were Estée Lauder Companies to acquire the business then the fashion would be produced under license, which is a reversal of the usual arrangements with fashion and beauty groups, where typically beauty is licensed.

Neither party has commented on the reports.