Kering Plans $4.7B Beauty Unit Sale to L'Oréal to Reduce Debt

Kering has agreed to sell its beauty division, including the high-end perfume brand Creed, to L'Oréal for approximately €4 billion ($4.66 billion) as part of a strategic shift to reduce its €9.5 billion net debt and refocus on its core fashion business under new CEO Luca de Meo. The deal grants L'Oréal exclusive 50-year licenses to develop, manufacture, and distribute fragrance and beauty products for Kering's luxury brands Gucci, Bottega Veneta, and Balenciaga, with the Gucci license commencing after the current agreement with Coty expires in 2028. This partnership aims to accelerate the growth of Kering's beauty brands by leveraging L'Oréal's expertise while Kering concentrates on its fashion portfolio. A strategic committee will be established to ensure brand coherence, and both companies plan to explore joint ventures in luxury wellness and longevity sectors. The transaction, subject to regulatory approval, is expected to close in the first half of 2026, marking a significant restructuring for Kering amid declining revenue and profits and increased investor pressure to deleverage. L'Oréal's CEO highlighted the deal as an opportunity to strengthen their position in the fast-growing niche fragrance market leveraging iconic luxury brands.