July 7 (Reuters) - Coty said on Tuesday it had agreed to transition the Gucci Beauty license back to Kering in a deal worth about $400 million, about a year before the original license term was due to end.
Under the agreement, Coty will continue to operate Gucci Beauty through at least June 30, 2027, before the license transfers back to Kering. The original license had been due to run for roughly another year.
The agreement follows Kering's beauty deal with L'Oréal last year, which included rights
to a long-term Gucci beauty license after Coty's existing contract expires.
Industry analysts had viewed the Gucci fragrance business as the crown jewel of Kering's beauty portfolio because of its potential to replicate the rapid growth L'Oréal achieved with Saint Laurent fragrances.
The Gucci license has been one of Coty's most valuable assets since the company acquired it through its purchase of Procter & Gamble's beauty brands in 2016.
The Gucci license has been one of Coty's most valuable assets since the company acquired it through its purchase of Procter & Gamble's beauty brands in 2016.
Coty said it plans to use the proceeds to reduce debt, invest in its core prestige fragrance and beauty brands and optimize its organizational structure.
The cosmetics company also agreed to sell Kering enough Gucci Beauty inventory to support the transition.
(Reporting by Sanskriti Shekhar in Bengaluru ; Editing by Tasim Zahid)
