Tom Ford is a newly minted billionaire, thanks to the $2.8 billion Estée Lauder deal

CNN affairs

A successful deal to sell his eponymous fashion brand has catapulted fashion designer Tom Ford into the global billionaires club.

The 61-year-old, who launched The Tom Ford Brand in 2005 and grew it into a luxury apparel and accessories powerhouse, sold his company Tuesday to Estée Lauder Companies (EL) in a $2.8 billion deal.

Estée Lauder’s acquisition of Tom Ford Brands is expected to close in the first half of next year, pending regulatory approvals. The deal will fully integrate 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 after co-launching the Tom Ford Beauty brand in 2006.

As a result of the sale, Ford now joins the ranks of global billionaires, according to 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. Ford’s existing portfolio also includes at least two homes, one in Los Angeles and one in New York City, with a combined value of $65 million, the publication said.

Ford will stay on as the brand’s “creative visionary” after the deal closes and will remain in that role through the end of 2023, the statement said.

Domenico De Sole, the Ford brand chairman who previously headed Gucci, will also remain on as a consultant 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 renew their existing licensing agreements, the company said. businesses.

Zegna, the luxury Italian fashion house, will extend its current agreement “with a long-term license to cover all men’s and women’s fashion, as well as accessories and underwear,” the company said. Marcolin will continue to make sunglasses and optical frames under the Ford brand.

Estée Lauder Companies, 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 in the coming years.

“As an owned brand, this strategic acquisition will open up 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 Parsons School of Design in New York and Paris. In 1990 he moved to Milan where he started his career in fashion as a designer of womenswear for Gucci. A few years later, he was appointed creative director and was responsible for all Gucci product lines, from clothing to perfumes.

During his 10 years in that role, Gucci’s sales rose from $230 million to more than $3 billion. In 2005, Ford struck out on his own and launched 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 extraordinary partner from day one that I founded the company and I am excited to see them become the luxury stewards in this next chapter,” he said.

—Parija Kavilanz of CNN contributed to this story.

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