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A blockbuster deal to sell his eponymous fashion brand has catapulted fashion designer Tom Ford into the club of global billionaires.
Ford, 61, who launched The Tom Ford brand in 2005 and grew it into a luxury clothing and accessories powerhouse, sold his company to Estee Lauder Companies (EL) on Tuesday in a deal valued at $2.8 billion.
The acquisition of Tom Ford Brands by Estee Lauder is expected to close in the first half of next year, pending regulatory approval. The deal will fully integrate Tom Ford Brands, which already has ongoing partnerships with the cosmetics and skincare giant, into Estee Lauder’s diverse portfolio.
The two companies have been partners for more than 15 years, since launching the Tom Ford Beauty brand together in 2006.
As a result of the sale, Ford now joins the ranks of global billionaires. forbes, Joe estimates that the designer, who owns about 64% of his company, will receive about $1.1 billion in cash from the sale after deducting estimated taxes. Ford’s current portfolio also includes at least two homes, one in Los Angeles and one in New York City, totaling $65 million, the publication said.
Ford will remain as the brand’s “creative visionary” after the deal closes and will continue 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 stay on 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.
Luxury Italian fashion house Zegna, the company said, will expand its existing arrangement “to include long-term licenses for all men’s and women’s fashion as well as accessories and underwear”. Marcolin will continue to make sunglasses and optical frames under the Ford brand.
Estée Lauder Companies, which is home to several global beauty brands including Clinique and Bobbi Brown, said annual sales of Tom Ford’s cosmetics are expected to reach $1 billion “in the next few years”.
“As an owned brand, this strategic acquisition will unlock new opportunities and strengthen our growth plans for Tom Ford Beauty,” Fabrizio Freda, President and CEO of Estée Lauder Companies, said in a statement.
Born in 1961 in Austin, Texas, 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 career in fashion 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 perfumes.
During his 10 years in that role, Gucci’s sales grew from $230 million to more than $3 billion. In 2005, Ford struck out on his own and started his own company.
Ford said in a statement that it “couldn’t be happier with this acquisition as The Estee Lauder Companies is the ideal home for the brand.”
“He has been an extraordinary partner since day one of building the company, and I am thrilled to have him as our luxury steward in this next chapter,” he added.
-CNN’s Parija Kavilanz contributed to this story.
