Kering Plans €4.7B Beauty Division Sale to L'Oréal With 50-Year Brand Licensing

Kering, the French luxury group known for owning Gucci and other brands, announced a strategic partnership with L'Oréal involving the sale of its beauty division, including the luxury perfume brand Creed, for €4 billion. This deal includes granting L'Oréal 50-year licenses to develop and distribute fragrance and beauty products for Gucci, Bottega Veneta, and Balenciaga, commencing after current licenses expire. The transaction aims to help Kering reduce its substantial debt of €9.5 billion and comes amid challenges such as a significant drop in turnover and profits, particularly due to slowing demand for Gucci in key markets like China. Following the announcement, Kering's shares rose over 5%, reflecting investor approval of the restructuring plan under new CEO Luca de Meo, who has quickly moved to refocus the company on its core fashion business. Despite the difficulties, analysts note this move signals a potential turning point for Kering as it seeks to improve financial stability and performance. L'Oréal's shares showed a modest increase, indicating a positive but cautious market reaction to the expanded luxury beauty collaboration.