Paris: French luxury group Kering, owner of Gucci, has agreed to sell its beauty division to L’Oréal for €4 billion (£3.5 billion), to cut debt and refocus on its core fashion business.
The sale includes Kering’s fragrance brand Creed, acquired in 2023, as well as a 50-year exclusive licence for L’Oréal to develop fragrance and beauty products under Kering’s fashion houses Gucci, Bottega Veneta, and Balenciaga. The new agreement will take effect in 2028, after the expiry of Gucci’s existing deal with Coty.
The transaction is the first major move by Kering’s new chief executive, Luca de Meo, who took charge less than two months ago. The deal aims to streamline operations and strengthen the company’s financial position after a challenging year marked by slowing demand and increasing debt. Kering’s net debt stood at €9.5 billion in June, alongside €6 billion in long-term lease liabilities.
Kering and @LOrealGroupe announced today that they are entering a long-term strategic partnership in luxury beauty and wellness.
More info: https://t.co/gnrHYqhGDB pic.twitter.com/UrZMINMDUA
— Kering (@KeringGroup) October 19, 2025
Kering launched its beauty business last year to diversify beyond Gucci, which contributes the majority of the group’s profits. However, the division has struggled to gain momentum, reporting a €60 million operating loss in the first half of 2025.
The decision to sell the beauty arm comes amid declining performance at Gucci, where revenue dropped 25 percent last quarter due to weaker sales in China.
The Italian label has undergone several management and creative changes, including the abrupt exit of creative director Sabato de Sarno earlier this year. Shares of Kering rose by 5 percent in early Paris trading following the announcement, while L’Oréal’s stock gained nearly 1 percent.
