Gucci rescue? Kering sells beauty division to L'Oréal

Beauty division acquired from luxury goods group Kering, including perfume manufacturer Creed and beauty and fragrance licenses.

The new Kering CEO, who took office on 15 September, has long Luca de Meo didn't wait to get the ailing Gucci parent company back on track. The agreement also includes a 50/50 joint venture to explore business opportunities in wellness and longevity.

The partnership also includes the right to conclude a 50-year exclusive license for the creation, development, and distribution of fragrance and beauty products for Gucci, beginning after the expiration of the current license with Coty. Kering will also grant L'Oréal 50-year exclusive licenses for the creation, development, and distribution of fragrance and beauty products for Bottega Veneta and Balenciaga, starting upon completion of the announced transaction. L'Oréal is to pay €4 billion for this in the first half of 2026. In return, L'Oréal will pay Kering royalties for the use of its licensed brands.

Kering subsidiary Gucci is weakening

Gucci hasn't been doing well for some time, and the numbers are weighing on the company's overall results. Kering's sales in the first half of 2025 amounted to €7.6 billion, down 16 percent year-on-year. After a 24 percent decline in the first quarter, the second quarter saw an 18 percent drop. Even more dramatic is the 46 percent drop in profits, to €474 million.

The Main brand Gucci, with which Kering has generated around 40 percent of its revenues, proved to be particularly problematic again, with a 26 percent drop in revenues to just over three billion euros in the first half of the year. Watch section There had already been massive job cuts this year.

“This strategic alliance marks a decisive step for Kering,” said Luca de Meo.

"By joining forces with the global leader in beauty, we will accelerate the development of fragrances and cosmetics for our major Houses, enabling them to achieve scale in this category and realize their immense long-term potential, just as Yves Saint Laurent Beauté did under the leadership of L'Oréal. Together, we will also expand into new areas of wellness, combining L'Oréal's unmatched expertise with our unique reach in the luxury sector. This partnership allows us to focus on what defines us best: the creative power and desirability of our Houses."

"I am delighted to enter into this long-term strategic alliance with one of the world's most prestigious, creative, and visionary luxury groups. This partnership will further solidify our position as the world's leading luxury beauty company and allow us to explore new avenues in wellness together," said Nicolas Hieronimus, CEO of the L'Oréal Groupe.