Il Kering Group forcefully enters the luxury perfume market. The French giant, led by the billionaire François-Henri Pinault and owner of among others Gucci, Bottega Veneta, Balenciaga and Yves Saint Laurent has signed an agreement for theacquisition of Creed, historic English brand of niche perfumes founded in 1760. The Group through the new division Kering Beauté, it will detect the 100% of the brand from funds controlled by BlackRock Long Term Private Capital Europe and the current Chairman Javier Ferran who had taken over, in 2020, the company from the founding family.
More the figures of the agreement are unknown. The all-cash transaction is expected to be completed in the second half of 2023, subject to obtaining the necessary clearances from competition regulators.
Creed: A Success Story
Founded in 1760 by James Henry Creed as a tailor at the service of European royal families, it began its entrepreneurial adventure by sending perfumed gloves to King George III, later becoming a supplier to the royal house. House of Creed has become one over the years renowned house of luxury fragrances, with a prestigious family heritage. Led by Olivier Creed and his son Erwin, the house of Creed is known for its creativity and traditional craftsmanship. Creed owns a rich collection of perfumes sophisticated including theiconic Aventus which regularly ranks among the top of luxury fragrance charts around the world. With a network of 36 flagship stores and high-quality distribution through approximately 1.400 global outlets, Creed offers a personalized and luxury experience to its customers.
In recent years, Creed has recorded an rrapid double-digit growth and remarkable profitability with very high EBITDA margins, without ever compromising on product quality or brand positioning. In the year ended March 31, 2023, the company generated revenues of over 250 million euros.
Kering: first acquisition for the new Kering Beauté division
The acquisition of Creed represents the first strategic move by Kering Beauté, a new division of the Group created a few months ago, whose management has been entrusted to Raffaella Cornaggia. Perfectly aligned with its portfolio of renowned luxury brands, Creed “will provide an opportunity to immediately gain adequate scale, an exceptional financial profile and a world-class platform to support the future development of other fragrance brands by particularly leveraging the global distribution of Creed” explains the French group in the acquisition note.
Among Kering Beauté lenses there is to accelerate the development of Creed in the Chinese market and in the Travel Retail sector, as well as the expansion of the portfolio of women's fragrances, body products and household products.
The high-end luxury fragrance segment is characterized by a remarkable dynamism, with double-digit growth rates, high profitability and significant revenue frequency. These features allow the sector to be resilient during different phases of the economic cycle. The beauty category represents a natural extension of the Kering universe and the Group is confident that its expansion into this strategic segment it will create lasting value both for the Group itself and for its Maisons.
“The acquisition of Creed represents the first strategic move by Kering Beauté and demonstrates our commitment to developing one leading position in the segment of luxury beauty. I am thrilled that today our stories and our values unite around this spirit of family entrepreneurship and excellence, to accelerate our journey in the beauty sector, and I am delighted that the brand joins the luxury houses of Kering” commented François-Henri Pinault, president and chief executive officer of Kering.
“Creed has a unique positioning in the fragrance market. We see in this operation a very convincing motivation and mutual strategic advantages in terms of skills, distribution network and geographical presence. We look forward to thereworking with CEO Sarah Rotheram and his passionate team to continue driving the success of Creed around the world,” he commented Raffaella Cornaggi, CEO of Kering Beauté.
