🤑 Tom Ford Just Sold His Business

This is The Level Ups. Modern business news for the future business leader (in plain-Jane English).

Tom Ford is officially a billionaire. 

• The background

• Deal details

• What’s next for Ford?

• Thinking about selling your business?

Let’s get into it.

Estimated Reading Time: 2 minutes & 8 seconds. 

Tom Ford Makes it Rain:

Ford, now 61, has a history of amazing success.

He become the Creative Director at Gucci in 1994, pushing the company to a 1,200% increase in sales. They hit nearly $3B—wild numbers for the time.

He later became Creative Director for Yves Saint Laurent in 2000, after Gucci acquired them.

When French fashion billionaire François Pinault, who founded luxury group Kering, acquired Gucci, Ford left and started his label, Tom Ford, in 2005.

Boy did it pay off.

I love this story because Ford dropped out of NYU to study design in New York and climbed the ranks after his first job at Chloe (in the press office).

Inspiring story of hustle and climbing his way up the ladder. Love it.

Deal Details:

Ford’s not the only winner here. The deal was valued at $2.8B.

That doesn’t mean he gets a single cheque. Here’s the breakdown:

• $2.3M in sales value (money paid in cash and debt).

• $300M in deferred payments (they’ll pay what Tom Ford’s brand owes).

• $250M from Marcolin to Estee Lauder as part of their licensing deal. Marcolin has the rights to Tom Ford eyewear and this was part of the valuation.

Now the fun part. The payouts:

• Ford walks away with $1.1B for 64% of the company (from on a 2013 filing).

• Business partner Domenico De Sole held just over 11% of the firm, now valued at $259 million (pre-tax).

• Zegna held a 15% stake in the company, worth an estimated $345 million (pre-tax)

• Grupo Americo Amorim, a Portuguese conglomerate owned the remaining 10%, now worth $230 million before taxes.

The sale includes debt and the payments from Marcolin, so the numbers won’t add up perfectly.

Do you feel like Tom Ford should be worth more? I see why. But the numbers are worth exploring.

They had profits of $96M based on a 2021 filing. Massive valuation when you think of the profits, but the buyer clearly sees value beyond a 29.1x multiple on profits. Revenues were $1.7B the same year.

That’s the power of having one of the best brands in the world.

So who bought it?

Estée Lauder. They’re happy, and so is Tom (obviously, he just got $1.1B).

What’s Next?

I’ll bet EL keeps everything the same. No way they change the name (that’s pretty much what they bought, looking at the valuation vs profits).

Ford and De Sole will stay with the company until the end of 2023. 

My bet? Ford moves more heavily into film and event production. But we’ll see.

Thinking About Selling Your Business?

Maybe you’re not Tom Ford looking for billions (don’t we wish we were), but anyone can start a small portfolio of small businesses.

Micro Acquire makes it easy.

They have the systems, tools, resources, and structure to make selling (or buying) your next internet business easy. Maybe now’s the time to become an internet entrepreneur and work from Bali.

What’s stopping you? Businesses start at $10k (that’s why it’s called “Micro” Acquire).

Thanks for reading!