Tom Ford

Thanks to the $2.8B Estee Lader deal, Tom Ford has become a new billionaire

Tom Ford, the fashion designer, and entrepreneur have been able to make a huge deal to sell his fashion brand.

Ford, 61 years old, founded The Tom Ford Brand in 2005. He grew it to luxury clothing and accessories and sold his company Tuesday, February 8, to Estee Lauder Companies, (EL), for $2.8 billion.

According to regulatory approvals, the acquisition of Tom Ford Brands by Estee Lauder will close in the first quarter of next year. The deal will integrate Tom Ford Brands into Estee Lauder’s diverse portfolio, as it already has a long-standing partnership with the cosmetics and skin care giant.

After launching Tom Ford Beauty together in 2006, the two companies have been together for over 15 years.

Forbes estimates that Ford, who was a designer and owned 64% of his company will now be a global billionaire. He will get about $1.1 billion cash after subtracting estimated taxes. Ford’s portfolio includes two homes in Los Angeles and New York City that are worth a total of $65 million.

According to the statement, Ford will remain the brand’s creative visionary after the deal is closed and continue in that role until 2023.

Domenico De Sole (the Ford brand’s chairman, who previously headed Gucci) will continue to be a consultant for the duration of the period.

According to the companies, the deal will be paid through cash, debt, and deferred payments due in 2025. It will enable Marcolin and Ermenegildo Zegna, two of Tom Ford’s current partners, to extend their existing licensing arrangements.

Zegna, the Italian luxury fashion house Zegna, will extend its existing arrangement to include a long-term license for all men’s, women’s, and accessories as well as underwear. Marcolin will continue to make sunglasses and optical frames under Ford’s brand.

Estee Lauder Companies is the home of several global beauty brands like Clinique and Bobbi Brown. It stated that it anticipates Tom Ford’s annual cosmetics sales to exceed $1 billion in the next two years.

Fabrizio Freda, President and CEO of Estee Lauder Companies, stated in a statement that “As an owned company, this strategic acquisition will unlock opportunities and fortify growth plans for Tom Ford Beauty.”

Design icon

Ford was born in Austin, Texas, in 1961. He studied art history at New York University, and then architecture at Parsons School of Design in New York. In 1990, Ford moved to Milan where he started his fashion career as a Gucci women’s wear designer. He was appointed creative director in 1990 and was responsible for all Gucci products, including clothing and perfumes.

Gucci’s sales grew from $230 million in the first 10 years to more than $3B during his tenure. Ford launched his company in 2005 on his own.

Ford stated in a statement that he was “happy with the acquisition of The Estee Lauder Companies, which is the perfect home for the brand.”

He said, “They have been an exceptional partner since the first day of my company creation and I am thrilled that they will become the luxury stewards for this next chapter.”

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