A Dryowner of Gucciwill sell its beauty business to L’Oréal for 4 billion euros. The decision is part of CEO Luca de Meo’s new strategy, which aims to reduce debt and focus the group on the fashion sector, advancing the “Reuters”.
With the agreement, the L’Oreal acquires the fragrance brand Creedpurchased by Kering in 2023 for 3.5 billion euros, and obtains exclusive rights, for 50 years, to develop perfumes and beauty products for the brands Bottega Veneta e Balenciaga.
A L’Oréal will also hold Gucci’s license when the current contract with Coty ends, scheduled for 2028.
According to Bernstein analysts, “sell at Kering Beauty for the same amount paid by Creed two years ago is a necessary measure”. Negotiations, which were already considered a possibility before De Meo’s arrival as leader, were accelerated this month.
A Purchase of Kering Beauté will be L’Oréal’s largest acquisition to datesurpassing that of the Australian brand Aesop, acquired in 2023 for 2.5 billion dollars (2.1 billion euros). Analysts consider that the incorporation of Creed reinforces L’Oréal’s position in the luxury fragrances market.
Debt has increased in recent months
The increase in debt was due to several episodes in recent months. THE European Commission had already fined the company last week by 157 million euros for limiting the resale prices of clothing, footwear and accessories for eight years.
Also the increase in tariffs caused luggage manufacturing companies to depreciate by an average of 18% this year, with an absolute drop of €34 billion in their market value.
The post Owner of Gucci sells beauty business to L’Oréal for €4 billion appeared first on Veritas News.
