What's Happening?
L’Oréal has announced a significant acquisition of Kering’s beauty portfolio for $4.6 billion. This deal includes the prestigious fragrance maker Creed, which Kering acquired in 2023, and grants L’Oréal exclusive rights to produce beauty products for Kering’s fashion
house brands, including Gucci, once its current agreement with Coty expires in 2028. The agreement also establishes a 50-50 joint venture to explore further business opportunities in beauty and wellness. Kering’s CEO, Luca de Meo, emphasized that this partnership with L’Oréal, a global leader in beauty, will accelerate the development of fragrance and cosmetics for Kering’s major houses, unlocking their long-term potential. The deal is expected to close in the first half of 2026.
Why It's Important?
This acquisition marks a strategic expansion for L’Oréal into the luxury fragrance and cosmetics market, enhancing its portfolio with high-end brands. For Kering, the deal allows it to focus on its core strengths in fashion while benefiting from L’Oréal’s expertise in beauty product development and distribution. The move comes as Kering has faced challenges in its beauty division, with losses at Gucci and Alexander McQueen, and dissatisfaction with the Gucci beauty line under Coty’s management. The transaction is poised to reshape the luxury beauty landscape, potentially boosting Kering’s financial performance and market position.
What's Next?
The completion of the deal in 2026 will likely lead to a restructuring of Kering’s beauty operations, with L’Oréal taking over production and distribution. Stakeholders in the luxury and beauty sectors will be closely monitoring the integration process and the performance of the newly acquired brands under L’Oréal’s management. The joint venture may also lead to innovative product lines and expanded market reach, influencing trends in the luxury beauty industry.
