Tom Ford becomes a billionaire after selling fashion brand to Estée Lauder

Tom Ford has officially reached billionaire status after beauty giant Estée Lauder acquired the designer’s fashion brand in a $2.8 billion deal.

The Estée Lauder Companies Inc announced on Tuesday it has signed an agreement to purchase the Tom Ford brand – which includes a vast empire of fashion, beauty, fragrance, and accessories – valued at $2.8bn. The global beauty brand said it will purchase Tom Ford for $2.3bn in cash and debt, plus $300 million in deferred payments to be paid out beginning in July 2025.

Estée Lauder will also receive a $250m payment from Marcolin, the Italian eyewear brand which holds the license for Tom Ford’s eyewear collection. Ford will receive an estimated $1.1bn in cash from the sale after taxes, according to Forbes.

The company is now the sole owner of the Tom Ford brand and all its intellectual property, according to a press release. Estée Lauder, which introduced its Tom Ford Beauty line in 2006, will now keep the existing license past its original 2030 expiration and will no longer have to pay royalty payments upon closing of the acquisition. The beauty company said that in the next few years it expects Tom Ford Beauty to bring in net sales of $1bn.

Tom Ford will continue to stay on as the brand’s “creative visionary” through the end of 2023, the statement said. Domenico De Sole, chairman of Tom Ford International, will also stay on as a consultant until that same time.

“I could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand,” the 61-year-old designer said at the time of the announcement. “They have been an extraordinary partner from the first day of my creation of the company and I am thrilled to see them become the luxury stewards in this next chapter of the Tom Ford brand.”

Born in Austin, Texas in 1961, the American fashion designer made waves when he became creative director of Gucci in 1994. Ford went on to be creative director of Yves Saint Laurent when Gucci acquired the French fashion house in 2000. With the designer serving as Gucci’s creative director, Gucci’s sales grew by almost 1,2000 per cent to nearly $3bn, according to Forbes. Ford and his business partner, De Sole, also oversaw Gucci’s acquisition of Balenciaga and Bottega Veneta.

He then launched his own eponymous luxury brand in 2005. Since then, he’s started a film production company, Fade to Black. He directed the 2009 film A Single Man, starring Colin Firth – who was nominated for best actor at the Academy Awards – and Julianne Moore. In 2015, he directed the film Nocturnal Animals starring Jake Gyllenhall and Amy Adams.