Estée Lauder announced this week that it will acquire Tom Ford’s eponymous fashion company, likely to make the designer a billionaire. The cosmetics company, which owns several other brands including MAC and Clinique, said it bought the brand in a deal valued at $2.8 billion that ended this week.
As part of the deal, the Estée Lauder Companies, Inc. will acquire the Tom Ford brand for $2.3 billion and Marcolin, which owns the Tom Ford eyewear license, for $250 million, according to a news release. The designer will walk away with an estimated $1.1 billion, according to Forbes.
Estée Laude is now the sole owner of the Tom Ford brand and all of its intellectual property, according to a press release. The company already had a deal with Tom Ford Beauty, but will now keep the license beyond its original 2030 expiration and no longer have to pay royalties.
Tom Ford Beauty achieved net sales growth of nearly 25% at the end of Estée Lauder’s fiscal year in June 2022, compared to the prior year. Estée Lauder expects the brand to rake in $1 billion in net sales, according to the press release.
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As for the newly acquired fashion house, Ford, 61, will continue to serve as the brand’s chief creative officer until 2023. Tom Ford International president Domenico De Sole will also remain as a consultant until 2023.
Ford’s company already has a long-standing licensing agreement with fashion house Ermenegildo Zegna, also known as Zegna, for accessories and underwear, which will be expanded under the deal. Ford’s licensing agreement with Marcolin, for eyewear, will also be “substantially extended,” according to the press release.
Estée Lauder expects to finance the transaction through a combination of cash, debt and $300 million in deferred payments to sellers due in July 2025.
“I could not be happier with this acquisition, as The Estée Lauder Companies is the ideal home for the brand,” Ford said in a statement. “They have been an extraordinary partner since day one of my company’s inception and I am delighted to see them become the luxury stewards in this next chapter of the Tom Ford brand.”
Ford became creative director of Gucci in 1994 and then creative director of Yves Saint Laurent when Gucci acquired the fashion house in 2000. During his time as creative director of Gucci, the company experienced 1,200% growth in sales, nearly $3 billion, according to Forbes. Ford and his business partner, De Sole, helped Gucci acquire Balenciaga and Bottega Veneta.
When French fashion billionaire François Pinault, who founded the Kering luxury group, acquired Gucci, Ford left and started his own label, Tom Ford, in 2005.
With the acquisition of his fashion brand by Estée Lauder, Ford is now a billionaire, according to Forbes. He will get about $1.1 billion in cash from the sale, after taxes, as he has owned about 64% of the company since 2013, according to a tax return.
Ford’s net worth is also made up of two homes, in Los Angeles and New York City, worth a collective $65 million, according to Forbes, and his total net worth is now estimated at $1.2 billion.
He also launched a film company, Fade to Black, in 2005, and has directed two movies as well. “A Single Man” (2009) starred Colin Firth, who was nominated for best actor at the Academy Awards, and Julianne Moore. “Nocturnal Animals” (2015) starring Jake Gylllenhall and Amy Adams.
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Caitlin O’Kane
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