A blockbuster deal to sell his eponymous fashion label catapulted fashion designer Tom Ford into the global billionaire club.
Ford, 61, who launched the Tom Ford brand in 2005 and turned it into a luxury clothing and accessories powerhouse, sold his business on Tuesday to Estée Lauder Companies
(EL) in a deal valued at $2.8 billion.
Estée Lauder’s acquisition of Tom Ford Brands is expected to be completed in the first half of next year, pending regulatory approvals. The deal will fully integrate Tom Ford Brands, which already has an ongoing partnership with the cosmetics and skincare giant, into Estée Lauder’s diverse portfolio.
The two companies have been partners for more than 15 years after launching the Tom Ford Beauty brand together in 2006.
Following the sale, Ford now joins the ranks of global billionaires, according Forbes, which estimates that the designer, who owned nearly 64% of his business, will receive around $1.1 billion in cash from the sale after estimated taxes have been deducted. Ford’s existing portfolio also includes at least two homes, one in Los Angeles and one in New York, collectively worth $65 million, according to the publication.
Ford will remain the brand’s “creative visionary” after the deal closes and will remain in that role until the end of 2023, the statement said.
Domenico De Sole, the Ford brand president who previously led Gucci, will also remain a consultant for the same period.
The deal, which will be settled by a combination of cash, debt and deferred payments due in 2025, will allow two of Tom Ford’s current partners, Ermenegildo Zegna and Marcolin, to extend their existing license agreements, it said. companies.
Zegna, the luxury Italian fashion house, will extend its current agreement “to include a long-term license for all men’s and women’s fashion, as well as accessories and underwear,” the company said. Marcolin will continue to manufacture sunglasses and optical frames under the Ford brand.
Estée Lauder Companies, home to several global beauty brands including Clinique and Bobbi Brown, said that he expects annual sales of Tom Ford cosmetics to reach $1 billion “over the next two years.”
“As a private label, this strategic acquisition will unlock new opportunities and strengthen our growth plans for Tom Ford Beauty,” Estée Lauder Companies President and CEO Fabrizio Freda said in a statement.
Born in Austin, Texas in 1961, Ford studied art history at New York University and later architecture at the Parsons School of Design in New York and Paris. He moved to Milan in 1990 where he began his fashion career as a womenswear designer for Gucci. A few years later, he was appointed creative director and responsible for all of Gucci’s product lines, from clothing to fragrances.
During his 10 years in this role, Gucci’s sales grew from $230 million to more than $3 billion. In 2005, Ford went on his own and launched his own company.
Ford said in a statement that it “couldn’t be happier with this acquisition as The Estée Lauder Companies is the perfect home for the brand.”
“They’ve been an amazing partner from day one of my founding the company and I’m thrilled to see them become the stewards of luxury in this next chapter,” he said.
– CNN’s Parija Kavilanz contributed to this story.