The French luxury group Kering, under the leadership of the new CEO Luca de meo, has signed an agreement from 4 billion euros for the sale of its beauty division L'Oréal, marking the first major deal for the Italian CEO, who arrived from Renault. The agreement not only represents a shift in strategy for Kering—which previously focused on growing its perfumes and cosmetics businesses internally—but also reflects the group's desire to strengthen its presence in the global luxury beauty market while also reduce your debtThe sale is a crucial step towards reducing Kering's net debt, which at the end of June amounted to 9,5 billion euros, in addition to 6 billion euros in long-term leasing liabilities, a situation that had raised concerns among investors. The decision also comes at a time when the group is facing slowing growth. Gucci, its flagship brand, has been hit by weaker demand in the key market of China, highlighting the need to focus resources and strategies on its core fashion business.
Since June, since the announcement of De Meo's arrival, the Kering title gained more than 60% on the Paris Stock Exchange.
Kering sells its beauty division to L'Oréal: terms of the agreement
The agreement provides for the sale of the division Kering Beauté, including the historical Maison Creed, with a total value of 4 billion euros, payable in cash at the closing, expected in the first half of 2026. In addition, L'Oréal will pay Kering royalties for the use of licensed brands, ensuring a continuous revenue stream even after the sale. Founded in 1760, Creed is a leading high-end perfumery house, renowned for its craftsmanship and use of rare natural ingredients. Integrated into the L'Oréal Luxe division, the house will be able to strengthen its international expansion, catering to a global audience of both women and men.
The agreement also includes the concession to L'Oréal of 50-year exclusive licenses for the creation, development, and distribution of Gucci-branded fragrances and beauty products, starting from the expiration of the current contract with Coty, in full compliance with Kering's contractual obligations. Similar licenses will also be granted for Bottega Veneta e Balenciaga, active from the closing of the operation.
To ensure maximum strategic alignment, a joint committee responsible for monitoring the progress of the partnership and maximizing synergies between the brands of the two groups.
Comments
“This strategic alliance – he commented of Meo – represents a decisive step for Kering. By joining forces with the global beauty leader, we will be able to accelerate the development of the fragrance and cosmetics lines of our main houses, enabling them to achieve adequate scale and unlock their full potential, as already happened with Yves Saint Laurent Beauté under L'Oréal's leadership. Together, we will explore new frontiers of well-being, combining L'Oréal's unique expertise with our ability to generate desirability in luxury. This partnership allows us to focus on what truly sets us apart: the creative power and appeal of our houses.”
"I am thrilled to enter into this long-term strategic alliance with one of the most prestigious, creative, and visionary luxury groups in the world. This agreement further consolidates our position as a global leader in luxury beauty and allows us to explore new opportunities in the wellness space. The integration of extraordinary brands such as Creed, Gucci, Bottega Veneta, and Balenciaga strengthens our portfolio and significantly expands our presence in dynamic, high-potential segments of luxury beauty," he emphasized. Nicholas hieronimus, CEO of the L'Oréal Group.
