Kering Sells Beauty Division to L’Oréal in €4 Billion Deal to Refocus on Core Fashion Brands

Kering SA (EPA:PRTP), the luxury group behind Gucci, has agreed to sell its beauty business to L’Oréal SA (EPA:OREP) for €4 billion ($4.66 billion) as part of its strategic shift to strengthen its core fashion operations. The deal, announced on Sunday, marks a major step in Kering’s ongoing efforts to reduce debt and regain financial stability under the leadership of new CEO Luca de Meo.

As part of the agreement, Kering will divest its House of Creed unit to L’Oréal, transferring ownership of the high-end fragrance brand. In addition, L’Oréal will secure 50-year exclusive licenses to develop and distribute fragrances and beauty products for Kering’s prestigious fashion houses—Gucci, Bottega Veneta, and Balenciaga. Both companies have also expressed interest in pursuing future collaborative opportunities to expand their partnership in the global luxury beauty sector.

The sale is seen as a decisive move by Kering to streamline its portfolio and focus on revitalizing its flagship fashion labels, particularly Gucci, which has struggled amid slowing luxury demand in major markets like China. Analysts note that the divestment could help the company significantly reduce its net debt, which has been a growing concern among investors in recent months.

For L’Oréal, the acquisition strengthens its dominance in the luxury fragrance market, adding Kering’s coveted brands to its extensive beauty portfolio. The deal highlights the growing trend of consolidation within the luxury sector as major players aim to adapt to shifting consumer behavior and global economic pressures.

With this transaction, Kering positions itself to rebuild profitability and brand strength, while L’Oréal continues to expand its leadership in premium beauty—a win-win for both French powerhouses.