Kering SA has agreed to sell its beauty division to L’Oreal SA as part of a long-term strategic alliance, as CEO Luca de Meo seeks to turn around the fortunes of the French luxury goods giant.
The owner of fashion brands including Gucci said the deal aims to accelerate growth, according to a statement issued by the two companies on Sunday evening.
The value of the deal is 4 billion euros ($4.7 billion), according to the statement.
Kering launched its beauty division in 2023. The company acquired high-end fragrance brand Creed that year for an estimated €3.5 billion to build out its beauty platform, but has been dealing with more pressing issues since then.
As part of the deal, L’Oréal, the world’s largest cosmetics and beauty company, will add Creed to its portfolio.
“By joining forces with the global beauty leader, we will accelerate the development of fragrances and cosmetics for our major houses, allowing them to achieve scale in this category and unleash their enormous long-term potential,” Di Meo said in the statement.
The sale is the first strategic move by Di Meo, who officially took over in September, as Kering faces a decline in Chinese demand and the threat of higher US tariffs. The group’s high debt burden also worried investors.
The CEO, who took over from François-Henri Pinault, is expected to reveal his strategic vision next spring. The Pinaults are the majority shareholders of Kering with a 42% stake and 59% voting rights.
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