French luxury group Kering has announced the sale of its beauty products business to cosmetics giant L’Oreal in a deal valued at $4.6 billion. The acquisition includes Creed, a leading perfume brand, and grants L’Oreal 50-year exclusive licenses to develop and distribute products under Kering’s prestigious fashion labels Gucci, Bottega Veneta, and Balenciaga.
This strategic partnership aims to establish a strong presence in the luxury beauty and wellness market. According to a joint statement, the deal is subject to regulatory approval, with payment expected in the first half of 2026. L’Oreal’s chief executive, Nicolas Hieronimus, expressed enthusiasm for the acquisition, citing Creed’s potential to establish the company as a leading player in the niche fragrance market.
The 50-year exclusive licenses for Gucci, Bottega Veneta, and Balenciaga will take effect after the current license with American company Coty expires in 2028. This move comes as Kering’s new CEO, Luca de Meo, works to reduce the group’s significant debt, which stands at approximately 9.5 billion euros. De Meo has called the deal a “decisive step for Kering,” indicating the company’s commitment to restructuring and strengthening its financial position.
In recent months, Kering has faced financial challenges, reporting a 46% drop in net profit and a 16% decline in revenue for the first half of the year. The sale of its beauty products business is expected to help alleviate some of the company’s debt burden. With this acquisition, L’Oreal is poised to expand its presence in the luxury beauty market, while Kering will focus on its core fashion business.
The partnership between Kering and L’Oreal marks a significant development in the luxury goods industry, highlighting the ongoing trend of consolidation and strategic alliances. As the beauty and fashion markets continue to evolve, this deal is likely to have a lasting impact on the industry’s landscape. With the sale expected to be completed in the coming years, both companies will be closely watched as they navigate this new chapter in their respective histories.