Gucci’s parent company is making a major strategic shift. Kering, the luxury conglomerate that owns iconic fashion brands like Gucci, Bottega Veneta, and Balenciaga, has sold its entire beauty business unit to cosmetics giant L’Oréal for a hefty €4 billion (approximately $4.66 billion).
This blockbuster deal marks a significant pivot by Kering’s new CEO, Luca de Meo, who’s dealing with the company’s mounting debt issues. Rather than trying to compete in the beauty industry, which requires different expertise and massive investment, Kering is choosing to focus on what it does best, high-end fashion. The €4 billion from this sale will help reduce the company’s debt burden and strengthen its financial position.
So what exactly is L’Oréal getting for its money? The deal includes Kering’s prestige fragrance line Creed, which has a cult following among perfume enthusiasts. More importantly, it includes a comprehensive 50-year license to produce beauty products under the Gucci, Bottega Veneta, and Balenciaga brands. However, this arrangement won’t kick in immediately, it starts after Gucci’s current beauty license expires in 2028.
The truth is, Kering’s beauty venture wasn’t exactly thriving. Kering Beauté, which the company launched with high hopes in 2023, struggled to achieve the scale needed to compete with established beauty giants and actually posted losses rather than profits.
For L’Oréal, this represents its largest acquisition to date and significantly strengthens its luxury beauty portfolio. The deal is expected to close in the first half of 2026, pending regulatory approvals. It’s a win-win: Kering gets much-needed cash, and L’Oréal gains prestigious brands.
