Just one month after taking office, Luca de Meo has set a decisive new course for Kering. Tasked with revitalizing the luxury group, [the executive has decided to sell its beauty division to L’Oréal for EUR 4 billion — a move that should help reduce the company’s debt. The transaction is expected to be completed in the first half of 2026.
Creed, Balenciaga, Bottega Veneta and Gucci
The deal disclosed yesterday provides for L’Oréal’s acquisition of the high-end fragrance brand Creed, that Kering took over in 2023, alongside 50-year licensing arrangements for beauty and fragrance lines. L’Oréal, which has held the Yves Saint Laurent license since 2008, will now be able to market cosmetics and perfumes under the Balenciaga or Bottega Veneta brands. Notably, L’Oréal is acquiring the Gucci license, currently held by Coty, but due to expire in 2028.
“A strategic committee will be established to ensure coordination between Kering brands and L’Oréal and monitor the progress of our partnership,” the two groups stated in a press release.
“The addition of these extraordinary brands perfectly complements our existing portfolio and significantly expands our reach into new, dynamic segments of luxury beauty. Through Creed, we will establish ourselves as one of the leading players in the fast-growing niche fragrance market. Gucci, Bottega Veneta and Balenciaga are all exceptional couture brands with enormous potential for growth,” highlighted Nicolas Hieronimus, CEO L’Oréal Groupe.
Beyond beauty, the deal also includes a planned 50/50 joint venture “to explore business opportunities at the intersection of luxury, wellness, and longevity.”
Biggest deal for L’Oréal to date
The acquisition of Kering’s beauty business will mark L’Oréal’s largest deal to date, bigger than its purchase of Australian brand Aesop for US$2.5 billion in 2023.
L’Oréal’s principal motivation appears to lie in the integration of Creed, a highly profitable brand that will enhance its presence in the rapidly expanding global ultra-luxury fragrance segment.
As for Gucci, despite its current challenges, the brand retains strong growth prospects in the beauty sector. L’Oréal’s capture of the license delivers a significant blow to competitor Coty.
L’Oréal posted first-half sales of EUR 22.47 billion in July, a 1.6% increase year-on-year. Its luxury division grew by 1%, generating more than EUR 7.65 billion in revenue.
