Thanks to Estée Lauder’s acquisition of his brand, Tom Ford has now officially become a billionaire.

On November 15, The Estée Lauder Companies Inc. (ELC) signed an agreement to acquire the leading high-end fashion and beauty brand Tom Ford. As a result, this deal will make Tom Ford’s longstanding partner ELC as the sole owner of the brand and all its intellectual property. 

The 61-year-old designer Tom Ford founded the Tom Ford Brand in 2005 and developed it into a luxury clothing and accessories powerhouse. In 2006, the company and ELC launched the Tom Ford Beauty brand together, beginning a long-standing partnership that has lasted more than 15 years. Since then, Tom Ford Beauty has developed into one of the most popular and coveted beauty brands in the world with a very distinctive line of fragrance, makeup, and skin care products that capture Tom Ford’s distinct vision of modern glamor and with ultimate quality.

In accordance with the agreement, Estée Lauder will finance the $2.8 billion acquisition by paying a total of $2.3 billion in cash, debt, and $300 million in deferred payments that will become due beginning in July 2025. Marcolin, the Italian group that has held the license for Tom Ford eyewear since 2005, will continue to do so and pay $250 million to Estée Lauder when the deal closes.

The deal is expected to close in the first part of calendar year 2023, although it is contingent on several conditions, including regulatory approvals.

Estée Lauder will license Tom Ford’s fashion, both men’s and women’s wear, to the Italian group Ermenegildo Zegna. In fact, Zegna and Tom Ford have had a quite close connection. Since 2006, Zegna started hold the license to produce and distribute Tom Ford men’s wear. But now, as per the agreement, it will serve as Estée Lauder’s sole licensee for Tom Ford men’s and women’s clothing, as well as accessories, jewelry, children’s clothing, and home wares. It will also be in charge of managing stores and shows, as well as ensuring that the brand maintains its reputation as a high – end brand and casts the kind of runway-related halo that encourages customer to buy beauty products.

After the acquisition complete and through the end of 2023, Tom Ford, the founder and CEO of Tom Ford International, will remain in charge of the brand’s creative vision. The chairman of Tom Ford International, Domenico De Sole, will continue in his role as a consultant until that time.

The deal which is the largest in the luxury industry this year shows the enduring power of perfume. It comes at a time when luxury businesses are searching for new development opportunities as opportunities in China, which was formerly the driving force behind the luxury beauty industries, has become more challenging due to strict pandemic restrictions. Estée Lauder was likewise had to lower its financial forecast for the upcoming year due to lower growth in China. The company’s stock has decreased by nearly 40% so far this year.

As a result of the deal, Tom Ford who owned nearly 64% of his company officially join the billionaire club after receiving about $1.1 billion in cash after taxes from the sale.

Tom Ford, who seemed very satisfied with the deal, said he “could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand.” He added: “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”.