How Tom Ford Built His Beauty Empire

How Tom Ford Built His Beauty Empire

What started with a single fragrance has expanded into cosmetics and, soon, skincare. Estée Lauder sees Tom Ford Beauty becoming its new $1 billion brand

 

Profanity sells.

No one knows this better than Tom Ford, who released “Fucking Fabulous,” an eau de parfum, during his spring 2018 runway show during New York Fashion Week last year. What was intended as a gimmicky, limited-edition scent went viral. A projected $400,000 in sales turned into $25 million, and the eau de parfum is now permanently part of the brand’s Private Blend collection of fragrances.

And it almost didn’t happen, Ford said.

“First of all, they [Tom Ford Beauty owner Estée Lauder Cos.] didn’t even want to launch it. I kept calling it Fucking Fabulous and I’d get it back with an asterisk. I was like ‘No no, we’re going to spell it out on the bottle.’ They had such a hard time understanding that. They said ‘You can’t put it online, we can’t sell it in Neiman Marcus … Can you call it ‘F-in Fabulous?’” Tom Ford told in an interview. “I knew it would be a hit with that name. I mean come on, for the person who has everything, what do you get them? You get them a bottle of Fucking Fabulous.”

Estée Lauder came around fast, lining up additional suppliers after initially underestimating demand, and introducing a PG-13 version of the bottle for more-conservative markets in Asia and the Middle East. Ultimately, everyone was on board with Fucking Fabulous, profanity and all.

“The more censored it is, the more people want it,” said John Demsey, executive group president at Estée Lauder.

Such is the power of Tom Ford Beauty, which since launching its first fragrance, Black Orchid, in 2006 has grown into one of the jewels of Estée Lauder’s portfolio. Half of sales now come from colour cosmetics – Boys & Girls Lip Color and Bitter Bitch nail lacquer are particularly popular – and a skincare line is in the works.

The brand is said to have added nearly $200 million in annual sales every year since 2015, and is close to exceeding $1 billion in annual retail sales, according to a person familiar with the company. In 2018, Lauder has four brands that topped $1 billion in annual net sales – La Mer, MAC Cosmetics, Estée Lauder and Clinique.

Ten figures is a key milestone for the conglomerate, which is looking to luxury brands like La Mer and Ford for growth as it struggles to reinvent MAC and Clinique to appeal to younger customers.

For Tom Ford, the rapid expansion of the last few years marks the culmination of plans to build a full-scale beauty brand he said he laid out before he launched his first fragrance.

While Estée Lauder provided the infrastructure and expertise, Tom Ford brought the vision and point of view perfected during a 14-year tenure at Gucci and Yves Saint Laurent — a view that has adapted well to the Instagram era.

“He had a different way of entering the market. What was super strategic and brilliant on his part was that he established from day one the ambition of being a global beauty brand,” Demsey said. “When we did the original storyboards, he actually designed what he wanted it to look like in ten years. He knew what he wanted his lipsticks to look like, his colour codes.”

The Black Orchid fragrance came first in 2006, the hero of Tom Ford’s Signature fragrance range, followed by 2007’s introduction of a 12-scent Private Blend collection that were all priced at $220, significantly higher than the Signature offerings. Tom Ford’s lipsticks, which retail for $55 each, came three years later, and in 2011, a complete assortment of colour cosmetics hit counters (today, colour counts for 50 percent of Ford’s business). Men’s grooming was added to the mix in 2013. Skincare, the missing leg of the trifecta required to claim a modern beauty empire, is in development, though a launch may be over a year off, Tom Ford said.

There’s been expansion globally, from an early base with Sephora in the US to 7,000 doors with the retailer and others worldwide. Asia makes up about 20 percent of overall sales.

The first dedicated Tom Ford Beauty store opened in London’s Covent Garden last November. The store’s front windows were lined with images of pinups on LED screens holding bottles of Fucking Fabulous between their legs. A second shop opened in Malaysia in June, and four are planned to open in China later this year.

“I’m always pushing,” said Tom Ford, who joked about trying to “steal” Demsey to run Yves Saint Laurent Beauté after the 1999 acquisition of Yves Saint Laurent by Gucci. “I don’t want to wait four years to be a $2 billion brand. I want to be a $2 billion brand faster, and a $3 billion and a $3.5 billion brand.”

Tom Ford’s eye for provocative images that put sexuality at the forefront has always been central to the brand’s success, something the designer took with him from his time at Gucci in the 1990s and later, Yves Saint Laurent. He left both houses in 2004, bringing his personal aesthetic to marketing campaigns for his beauty brand which he launched two years later. Perhaps the most controversial was a 2007 campaign for a men’s scent that featured a nude closeup of a woman’s crotch, with a bottle of cologne hiding her genitals.

We were a lot more comfortable in our culture [at the time] in exploiting women than we were men but I’ve always been an equal opportunity objectifier

“He knew his olfactive corridors, he knew the importance of dual gender … it was never positioned as a men’s or women’s brand,” Demsey said, calling Ford one of the first to understand the seismic movement taking place in terms of communication and the importance of digital storytelling.

Ford said his brand’s visuals have become less provocative, as mainstream youth culture accepts gender fluidity and “boys wearing makeup.” Nude crotch shots are less likely to make an appearance in Tom Ford’s beauty marketing these days.

“That was a long time ago, I was still drinking then. That was a different time and I’d come off an era of shaving ‘G’s’ in women’s crotches [at Gucci]. I couldn’t do that same ad today,” he said. “I’m not unproud of that ad. I also shoved a bottle up a guy’s asshole in an ad. We did an equal opportunity objectification campaign and it ran in a few places that would take the ad. We were a lot more comfortable in our culture [at the time] in exploiting women than we were men but I’ve always been an equal opportunity objectifier.”

In a nod to the times, Ford decided against turning bestseller Bitter Bitch into a scent, determining that it wouldn’t be a hit in the current political climate. Instead, next month will see the rollout of Lost Cherry, a gourmand with key notes of black cherry packaged in a translucent pink flacon.

Demsey said Tom Ford Beauty has been instrumental in attracting younger customers to Estée Lauder, particularly through Sephora.

Artemis Patrick, Sephora’s executive vice president, chief merchandising officer, said a “robust sampling strategy” and offering certain products in smaller sizes has helped convince young consumers to pay premium prices. For example, smaller-sized Boys & Girls Lip Color, with names like Warren, Charles and Ashley, retail for $36 a piece, compared with $55 for Tom Ford Beauty’s full-sized lipsticks.

“They really think of Tom Ford as an overall brand beyond lipsticks, makeup and juices,” Patrick said. “Sampling is so critical. Once they try the product, that’s when you get get over the price resistance.”

In addition to the Asia expansion and a buildout of the colour category, including the more editorial, highly pigmented Extrême range that debuted in early 2018, skincare is the next major project on deck, Tom Ford said. US sales in this category shot up 15 percent to $5.5 billion in the year ending in August, according to NPD.

Ford gave few details other than that the products “actually do something for your skin,” and will be tweaked to cater to skincare regimens in different markets. He said he’s already using “prototypes” of a moisturizer that’s in development for a “new branch of the company we’re about to launch.”

Similar to Fucking Fabulous, Ford is hopeful he can replicate viral success with an entirely new category.

“I’ve been through this before at Gucci. There’s a tipping point where all of a sudden your brand becomes very recognized – where you’re no longer known by a few and you start to become known by everyone,” he said. “Once that happens, growth is very fast. I have every reason to believe it will [with beauty] because I’ve seen this happen before, and I’ve been part of it before.”