In a major shift within the global luxury market, French conglomerate Kering, the parent company of Gucci, has announced the sale of its beauty products division to L’Oréal for a staggering $4.6 billion. The strategic transaction marks a pivotal moment for both companies, redefining the landscape of high-end cosmetics and fragrance.
The deal includes Kering’s renowned perfume brand Creed, one of the most prestigious names in the luxury fragrance world. Alongside the sale, L’Oréal has also secured exclusive 50-year global licenses to develop, produce, and distribute beauty and wellness products for Kering’s leading fashion houses — Gucci, Bottega Veneta, and Balenciaga.
In a joint statement released on Sunday, Kering and L’Oréal confirmed that they are entering a “long-term strategic partnership in luxury beauty and wellness.” The agreement, valued at around 4 billion euros, is pending regulatory approval and is expected to be finalized during the first half of 2026.
L’Oréal CEO Nicolas Hieronimus described the acquisition as a powerful addition to the company’s growing luxury portfolio, saying, “Through Creed, we will establish ourselves as one of the leading players in the fast-growing niche fragrance market.”
The 50-year licensing arrangement will officially take effect once the current contract with U.S. cosmetics group Coty expires in 2028, signaling a long-term transformation in L’Oréal’s luxury segment.
For Kering, the divestment comes at a critical financial juncture. The luxury group, which has faced mounting debt and slowing sales, is working to streamline its operations and restore profitability. As of mid-2025, Kering’s debt stands at approximately €9.5 billion, while the company’s net profit dropped by 46 percent in the first half of the year to €474 million, with revenue down 16 percent to €7.6 billion.
Kering’s new CEO, Luca de Meo, who took the reins just a month ago, called the agreement a “decisive step for Kering,” emphasizing that the sale will strengthen the group’s financial stability and allow it to refocus on its core fashion and luxury businesses.
The move positions L’Oréal to further consolidate its dominance in the global beauty market, while Kering seeks to navigate a challenging economic landscape by prioritizing its most profitable fashion assets. The sale underscores how leading luxury houses are reshaping their strategies to balance growth, innovation, and financial sustainability in an increasingly competitive industry.
