A decisive blow to turn around the luxury giant. The French luxury group Kering, financially battered for several years, will sell its beauty division to its compatriot L’Oréal for 4 billion eurosaccording to a joint press release published this Sunday, October 19. The transaction is expected to be completed in the first half of 2026. The agreement, which includes the sale of the luxury perfume brand Creed, also includes “the establishment of fifty-year licenses for Kering’s iconic brands” (Gucci, Bottega Veneta and Balenciaga), L’Oréal has already held the license since 2008 Yves Saint Laurent.
The partnership includes “the rights to enter into an exclusive licensing agreement for a period of fifty years for the creation, development and distribution of Gucci perfume and beauty products, commencing after the expiration of the current license with Coty, in compliance with the Kering Group’s obligations under the existing licensing agreement”. According to a note from HSBC analysts, the license expires at the American Coty in 2028.
An unprecedented alliance to revolutionize luxury beauty
It is also included a “exclusive partnership, planned in the form of a 50/50 joint venturewhich will create experiences and services combining L’Oréal’s innovation capabilities and Kering’s in-depth knowledge of luxury customers. “The addition of these extraordinary brands perfectly complements our existing portfolio and significantly expands our presence in new dynamic segments of luxury beauty (…) Gucci, Bottega Veneta and Balenciaga are all exceptional couture brands with enormous growth potential.declares the general director of L’Oréal, Nicolas Hieronimus, quoted in the press release.
“This strategic alliance marks a decisive step for Kering»declares its general director, Luca de Meo, quoted in the press release. “This partnership allows us to focus on what defines us best: our creative power and the attractiveness of our homes”adds the boss who took office in September, with the mission of turning around the group which has been battered for several years by the difficulties of its flagship brand, Gucci. This alone ensures 44% of turnover and two thirds of operational profitability, but continues to go through a bad patch.
“The current situation (…) strengthens our determination to act without delay,” declared Luca de Meo on the day of his appointment, September 9. We will have to continue to get out of debt and, where necessary, rationalize, reorganize and reposition some of our brands.” Kering announced in July a drop of 46% in its net profit in the first half, to 474 million euros, a plunge of 16% in its turnover, to 7.6 billion eurosand a debt of 9.5 billion euross. This sale to L’Oréal should allow the group to reduce its debt. The 4 billion euros will be “payable in cash upon completion of the transaction planned for the first half of 2026”specifies the press release.
