Hong Kong
CNN Business
—
A highly successful deal to sell his eponymous fashion label has catapulted fashion designer Tom Ford into the global club of billionaires.
Ford, 61, who launched The Tom Ford Brand in 2005 and built it into a luxury clothing and accessories powerhouse, sold his company Tuesday to the Estée Lauder Companies.
(THE) in a deal valued at $2.8 billion.
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 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.
As a result of the sale, Ford now joins the ranks of global billionaires, according to Forbes, which estimates that the designer, who owned nearly 64% of his company, will receive about $1.1 billion in cash from the sale after deducting estimated taxes. Ford’s existing portfolio also includes at least two homes, one in Los Angeles and one in New York City, valued at a total of $65 million, the publication said.
Ford will remain as the brand’s “creative visionary” after the deal closes and will remain in that role through the end of 2023, according to the statement.
Domenico De Sole, the president of the Ford brand who previously led Gucci, will also remain as a consultant for the same period.
The deal, to be settled through a mix 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, the companies said.
Zegna, the luxury Italian fashion house, will expand 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.
The Estée Lauder Companies, which is 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 “within 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 named creative director and was responsible for all of Gucci’s product lines, from clothing to perfume.
During his 10 years in that role, Gucci’s sales increased from $230 million to more than $3 billion. In 2005, Ford became independent and launched his own company.
Ford said in a statement that it “could not be happier with this acquisition, as The Estée Lauder Companies is the ideal home for the brand.”
“They have been an amazing partner from day one of my company creation and I am delighted to see them become the luxury managers in this next chapter,” he said.
–CNN’s Parisja Kavilanz contributed to this story.
