The French luxury powerhouse Kering, which oversees prestigious fashion houses including Gucci, Balenciaga, and Yves Saint Laurent, has revealed a significant strategic decision aimed at streamlining its brand portfolio. The group has reached an agreement to sell its dedicated beauty product division to L'Oréal, the global cosmetics giant, for a total of 4 billion euros. This sum, equivalent to 4.66 billion dollars, will be paid entirely in cash. This pivotal move was initiated under the direction of Luca De Meo, who assumed the role of Chief Executive Officer in September 2025, succeeding the former CEO, François-Henri Pinault.
This substantial financial transaction serves two critical objectives for Kering. Primarily, the divestiture is designed to significantly alleviate the group’s debt burden. Reports indicated that Kering carried a staggering 9.5 billion euros in net debt as of the end of June 2025, compounded by an additional 6 billion euros in long-term lease obligations. Secondly, the sale allows the company to channel its resources and management focus exclusively toward fortifying its standing in its primary segment: high fashion. This strategic pivot is particularly timely given the backdrop of decelerating sales growth for its flagship asset, Gucci, particularly within the crucial Chinese market.
For L'Oréal, the world leader in the beauty industry, this acquisition marks the largest deal in its corporate history. It represents a monumental expansion into the highly lucrative sector of luxury perfumery and cosmetics. The agreement specifically mandates the transfer of the Creed fragrance brand to L'Oréal, a niche perfume house that Kering itself had acquired in 2023 for 4 billion euros. Furthermore, L'Oréal secures exclusive 50-year licenses for the development, manufacturing, and distribution of cosmetic and fragrance lines associated with Kering’s esteemed brands, which include Gucci, Bottega Veneta, and Balenciaga.
In return for granting these long-term licenses, Kering is positioned to receive ongoing royalty payments for the use of these highly recognized luxury marques, thereby securing a steady stream of long-term revenue. The formal conclusion of this major corporate restructuring is anticipated to take place during the first half of 2026. This decisive maneuver underscores the commitment of Kering’s new leadership to achieve greater operational agility and clarity in its development vector, effectively liberating internal capital and energy to deepen its expertise in the areas where the brand traditionally holds the strongest competitive advantage.