Kering Deal Expands L’Oréal Luxe Portfolio With Rights to Creed, Gucci, Balenciaga
Global luxury group Kering — which includes such brands as Gucci, Saint Laurent and Balenciaga — has sold the long-term rights for its beauty business to L’Oréal for $4.7 billion.
Under the long-term strategic relationship, L’Oréal acquires the fragrance license for Kering's Creed and Beauté brands and also gains exclusive rights to develop fragrance and beauty innovations for other luxury brands, under certain rules and restrictions.
The company will enter into a 50-year exclusive license for the creation, development and distribution of fragrance and beauty products for Gucci. This begins after the current license with Coty expires and must respect Kering's existing license agreements.
L’Oréal also obtains 50-year exclusive licenses for the creation, development and distribution of fragrance and beauty products for Bottega Veneta and Balenciaga upon the deal's finalization.
The companies will form a strategic committee to navigate the 50/50 joint venture, which will also explore further business opportunities in the wellness space that look to blend "L’Oréal’s innovation capabilities with Kering’s deep understanding of luxury clients."
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“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, as did Yves Saint Laurent Beauté under L’Oréal’s stewardship," said Luca de Meo, CEO of Kering, in a statement.
Nicolas Hieronimus, CEO of L’Oréal, said the acquisition of Creed helps establish the company as one of the leading players in the fast-growing niche fragrance market.
"Gucci, Bottega Veneta and Balenciaga are all exceptional couture brands with enormous potential for growth," he added.
