Kering is offloading its cosmetics and fragrance operations to L’Oréal for EUR 4 billion, the two firms revealed on Sunday, October 19, thus confirming earlier reports from The Wall Street Journal. With this transaction, the French premium group is withdrawing from its diversification initiatives in the perfume and beauty sector.
Just a month following his appointment, Luca de Meo has established a bold new direction for Kering. Entrusted with reinvigorating the luxury conglomerate, the executive has decided to transfer its beauty segment to L’Oréal for EUR 4 billion — an action that should aid in decreasing the company’s financial burden. The conclusion of the transaction is anticipated during the first semester of 2026.
Creed, Balenciaga, Bottega Veneta and Gucci
The agreement revealed yesterday outlines L’Oréal’s purchase of the prestigious perfume label Creed, which Kering acquired in 2023, in conjunction with 50-year licensing agreements for beauty and fragrance ranges. L’Oréal, which has maintained the Yves Saint Laurent license since 2008, will now possess the capacity to commercialize cosmetics and scents under the Balenciaga or Bottega Veneta trademarks. Specifically, L’Oréal is obtaining the Gucci license, presently under Coty’s control, set to lapse in 2028.
“A strategic board will be formed to guarantee synchronization between Kering brands and L’Oréal and oversee the advancement of our collaboration,” the two entities communicated in a public statement.
“The incorporation of these remarkable labels ideally enriches our current selection and considerably broadens our access into novel, vibrant sectors of luxury beauty. Through Creed, we will establish ourselves as a top participant in the swiftly advancing niche fragrance sphere. Gucci, Bottega Veneta and Balenciaga are all outstanding couture labels with immense possibilities for expansion,” emphasized Nicolas Hieronimus, CEO L’Oréal Groupe.
Aside from beauty, the arrangement also encompasses a projected 50/50 joint venture “to investigate entrepreneurial prospects where luxury, wellness, and longevity intersect.”
L’Oréal’s most substantial transaction to date
The procurement of Kering’s beauty operations will represent L’Oréal’s biggest deal so far, exceeding its acquisition of the Australian brand Aesop for US$2.5 billion in 2023.
L’Oréal’s primary impetus appears to be the assimilation of Creed, a highly lucrative label that will amplify its standing in the rapidly escalating global ultra-premium fragrance market.
Regarding Gucci, despite its present difficulties, the brand preserves robust growth opportunities within the beauty domain. L’Oréal’s securing of the license represents a noteworthy setback for rival Coty.
L’Oréal declared first-half revenues of EUR 22.47 billion in July, reflecting a 1.6% rise year-on-year. Its luxury division experienced a 1% increase, yielding over EUR 7.65 billion in income.
