French luxury group Kering, owner of fashion brand Gucci, is in advanced talks to sell its beauty division to L’Oreal for about $4 billion, the Wall Street Journal reported yesterday, citing people familiar with the matter.
L’Oréal, the world’s biggest dedicated cosmetics and beauty player, would acquire fragrance brand Creed and gain rights to develop beauty products tied to Kering’s fashion labels, including Bottega Veneta, Balenciaga, and McQueen, the WSJ reported, adding the deal could be announced next week.
Kering, controlled by the French Pinault family, launched its beauty division in 2023, the year it acquired high-end fragrance label Creed for 3.43bn euros ($4bn) in cash.
If confirmed, the sale would be a major step forward by new CEO Luca De Meo, who officially took office in September, to address a high-debt issue that had sparked investor anxiety.
Kering’s net debt was 9.5bn euros at the end of June.
The company has struggled to reverse slowing sales at its largest brand Gucci as the luxury market has been hard hit by lower consumer demand, especially in China, which had led growth in the sector for more than a decade.
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