Chris Burch, the former husband of fashion designer Tory Burch, sold about half of his 28.3 percent stake in New York-based retailer Tory Burch LLC Dec. 31, settling a year-old legal dispute between the couple, according to two people familiar with the transaction.

The sale values the closely held operation at about $3.3 billion, according to New York-based research firm PrivCo Media LLC, and makes Tory Burch, 46, a billionaire. The two people said Chris Burch, 59, will retain about a 15 percent stake in the New York-based operation, which sells high-end women’s clothing and accessories, including popular ballet flats adorned with the company’s double-T logo.

The sale comes amid a bull market for fashion companies, including Italy’s Prada SpA, whose shares more than doubled in 2012. New York-based Michael Kors Holdings Ltd. shares were up 87.3 percent during the year, and Germany’s Hugo Boss AG rose 44.5 percent.

“The performance of IPOs from Prada and Michael Kors are a setup for an offering from Tory Burch this year,” said Sam Hamadeh, CEO of PrivCo, in a telephone interview. “Right now, hers is mostly a U.S. brand. The upper class, preppy American look she sells -- and lives -- puts her in a good position to do very well overseas.”

Handbags, Shoes

Tory Burch LLC sells handbags, shoes, dresses and eyeglasses through more than 80 Tory Burch retail stores and other outlets, such as Neiman Marcus, Nordstrom and Bloomingdale’s. In fiscal year 2012, the company generated more than $760 million in revenue and about $230 million in earnings before interests, taxes, depreciation and amortization, PrivCo said.

Based on the average enterprise value-to-sales and enterprise value-to-Ebitda multiples of five publicly traded peers -- Prada, Boss, Michael Kors, Ralph Lauren Corp. and Hermes International -- the company could be worth more than $3.4 billion, according to data compiled by Bloomberg. Enterprise value is defined as market capitalization plus total debt minus cash.

Chris Burch sold the stake, which he held through investment company JCB Investments LLC, to General Atlantic LLC, a Greenwich, Connecticut-based private equity firm, and BDT Capital Partners LLC, the Chicago-based investment company run by Byron Trott, a former Goldman Sachs Group Inc. vice chairman. Because the deal was completed in 2012, it will save Burch millions of dollars in capital gains taxes, which were raised by Congress to 20 percent from 15 percent on Jan 1.

Tory Burch, whose mother dated Marlon Brando and father once courted Grace Kelly, owns 28.3 percent of the company. Her stake is worth about $935 million, based on the transaction. Her net worth exceeds $1 billion after accounting for more than $70 million she received from equity sales and dividends in the past decade, according to PrivCo.

Blavatnik Investment