French luxury conglomerate Kering, the parent company of Gucci, is reportedly nearing a deal to sell its beauty division to L’Oréal in a transaction valued at around $4 billion. The move aligns with new CEO Luca de Meo’s strategy to streamline operations and refocus on the group’s core fashion and luxury businesses amid slowing global growth.
Kering’s Strategic Shift
The potential sale comes as Kering faces headwinds from declining Gucci sales in China and weaker performance from Saint Laurent in the United States. By divesting its beauty arm — which includes luxury fragrance brand Creed — Kering aims to sharpen its focus on fashion, leather goods, and accessories, sectors that form the backbone of its brand identity and profitability.
L’Oréal’s Expansion in Luxury Beauty
For L’Oréal, acquiring Kering’s beauty division offers a significant opportunity to expand its high-end portfolio. The addition of Creed and other exclusive fragrance labels could enhance L’Oréal’s presence in the luxury segment, positioning the company to capture growth across both mature and emerging markets.
Analysts suggest the acquisition could strengthen L’Oréal’s dominance in the premium beauty and fragrance market, while also enabling collaborations with Kering’s fashion houses on new product lines and brand synergies.
Mutual Benefits and Market Impact
Industry observers see the deal as mutually beneficial: Kering can refocus on its fashion houses, while L’Oréal gains globally recognized brands and access to new customer bases. The transaction may also open doors for future cross-promotional efforts across fashion, fragrance, and cosmetics.
What’s Next?
Though discussions are reportedly in their final stages, neither company has issued an official statement. If completed, the sale would mark one of the largest luxury beauty acquisitions in recent years, highlighting ongoing consolidation within the global beauty industry.
The deal’s completion will likely depend on regulatory approvals and integration planning, which could extend over several months. Market watchers are keeping a close eye on developments, as the outcome could reshape both Kering’s portfolio and L’Oréal’s influence in the high-end beauty sector.
