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gucci Owner Dry has agreed to sell its beauty business to L’Oreal for four billion euros (£3.5 billion), as the two French businesses team up to enter wider markets.
House of Luxury Fragrance Brand creed Under the deal, L’Oréal will become part of the Lux division, joining such Yves Saint LaurentBeauty lines from Armani, and Prada.
L’Oréal will also secure a 50-year license agreement to create beauty and fragrance products for Kering brands Gucci, Bottega Veneta and Baleniaga.
The companies said the deal is valued at four billion euros ($3.5 billion), and the transaction is expected to take place during the first half of 2026.
Kering said the tie-up with L’Oréal will help enhance the beauty range of its global luxury brands.
Chief executive Luca De Meo said: “By joining forces with the global leader in beauty, we will accelerate the development of fragrances and cosmetics for our leading houses, allowing them to achieve scale in this category and unlock their huge long-term potential, just as L’Oréal led Yves Saint Laurent Beaute.”
Nicolas Hieronymus, Chief Executive of L’Oréal Group, said: “The addition of these exceptional brands perfectly complements our existing portfolio and significantly extends our reach into new, dynamic areas of luxury beauty.
“Through Creed, we will establish ourselves as one of the leading players in the rapidly growing niche fragrance market.
“Gucci, Bottega Veneta and Baleniaga are all extraordinary couture brands with huge potential for growth.”
juice moldInvestment Director at AJ Bell said: “Beauty and wellness are markets with significant untapped potential, and L’Oréal and Kering are teaming up to try to capitalize on this opportunity.
“For Kering, it’s the first big move from new Chief Executive Luca de Meo as he looks to turn around the struggling luxury goods firm’s fortunes.”
Kering recently revealed that its sales in the first half of 2025 were down 16% from the previous year, with Gucci’s revenue falling by almost a quarter.
The company’s net debt stood at 9.5 billion euros (£8.3 billion) at the end of June.
Mr Mold said the deal with L’Oréal would give it access to the French rival’s logistics capabilities and help it “make a meaningful dent in its tough borrowing pile”.