Gucci and Balenciaga shift direction: Kering sells business to L'Oreal for €4 billion
Photo: Owner of Kering brands sells cosmetics business to L'Oreal (Getty Images)
French fashion giant Kering, which owns such well-known brands as Gucci, Balenciaga, Bottega Veneta, and Yves Saint Laurent, has announced the sale of its cosmetics division to L'Oreal. The deal, finalized on October 19, is valued at €4 billion (approximately $4.7 billion), according to the company's press release.
What is known about the deal
Through this acquisition, L'Oreal, the world's largest cosmetics manufacturer, will gain control of the Creed brand, one of the most famous luxury perfume producers. The move will strengthen L'Oreal's position in the high-end fragrance segment, where competition has significantly intensified in recent years.
"Joining forces with the global leader in beauty, we will accelerate the development of fragrance and cosmetics for our major houses, allowing them to achieve scale in this category and unlock their immense long-term potential," said Kering CEO Jean-Marc Duplaix.
The sale of the cosmetics business became the first strategic decision by the new executive, who took office in September. The company explained that this step will help reduce its debt load, which reached about $11 billion by the end of June, and will allow it to focus on reviving its core brands, primarily Gucci.
Demand for Kering products in China has recently declined, while in the United States the company faces the risk of higher tariffs. Investors have also expressed concern over its debt levels and slowing sales in the premium segment.
What is known about Kering
Kering established its cosmetics division only in 2023 after acquiring the Creed brand for €3.5 billion. However, due to economic challenges, the company has decided to refocus on developing its fashion lines.
Despite the changes, the Pinault family, which founded Kering, remains the main shareholder. It holds 42% of the shares and 59% of the voting rights. Duplaix has promised to present an updated company strategy in the spring of 2026, aimed at leading the Gucci empire into a new stage of growth.
