A blockbuster deal to sell his namesake fashion brand catapulted fashion designer Tom Ford into the global billionaire club.
The 61-year-old Ford, who launched The Tom Ford Brand in 2005 and grew it into a luxury apparel and accessories company, sold his company to the Estée Lauder Companies (EL) on Tuesday in a deal worth $2.8 billion .
Estée Lauder’s acquisition of Tom Ford Brands is expected to close in the first half of next year, subject to regulatory approvals. The transaction fully integrates Tom Ford Brands, which already has a partnership with the cosmetics and skincare giant, into Estée Lauder’s diverse portfolio.
The two companies have been partners for more than 15 years, having jointly launched the Tom Ford Beauty brand in 2006.
With the sale, Ford now joins the ranks of global billionaires forbes, which estimates the designer, who owned nearly 64% of his company, will receive about $1.1 billion in cash from the sale after estimated taxes are deducted. Ford’s existing portfolio also includes at least two homes, one in Los Angeles and one in New York City, which together are valued at $65 million, the publication said.
According to the statement, even after the deal closes, Ford will remain in that role as the brand’s “creative visionary” through the end of 2023.
Domenico De Sole, President of the Ford brand, who previously ran Gucci, will also remain as an advisor during the same period.
The deal, which will be settled through 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 licensing agreements, the companies said.
Zegna, the Italian luxury fashion house, will “expand its current agreement to include a long-term license for all menswear, womenswear, accessories and underwear,” the company said. Marcolin will continue to manufacture sunglasses and optical frames under the Ford brand.
The Estée Lauder Companies, which is home to several global beauty brands including Clinique and Bobbi Brown, said it expects annual sales of Tom Ford’s cosmetics to reach $1 billion “within the next few years.”
“As a separate brand, this strategic acquisition will open up new opportunities and strengthen our growth plans for Tom Ford Beauty,” said Fabrizio Freda, president and CEO of The Estée Lauder Companies, 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. In 1990 he moved to Milan where he started his fashion career as a womenswear designer for Gucci. A few years later he was appointed creative director and was responsible for all of Gucci’s product lines, from clothing to perfumes.
During his 10 years in that role, Gucci sales grew from $230 million to over $3 billion. In 2005, Ford became self-employed and founded his own company.
Ford said in a statement that he “could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand.”
“They have been an exceptional partner from day one when I founded the company and I am delighted to see them in this next chapter on luxury stewards,” he said.
– CNN’s Parija Kavilanz contributed to this story.