'A win-win for both companies and consumers': Experts react to L’Oréal’s €4 billion Kering deal

The industry is abuzz as Kering, the owner of Gucci, has agreed to sell its beauty division to L’Oréal for €4 billion (£3.5 billion). The deal marks a major collaboration between the two French giants, positioning them to expand their reach in the global beauty market.

Luxury fragrance brand House of Creed will become part of the L’Oreal Luxe division under the deal, joining the likes of Yves Saint Laurent, Armani, and Prada’s beauty ranges.

L’Oreal will also gain a 50-year licence agreement to create beauty and fragrance products for Kering brands Gucci, Bottega Veneta and Balenciaga.

Beyond beauty, Kering and L’Oréal will form a 50/50 joint venture focused on the intersection of luxury, wellness, and longevity.

The companies aim to combine L’Oréal’s scientific and beauty innovation with Kering’s expertise in luxury to develop new services and experiences in the growing wellness segment.

Here's what the industry thinks...

Millie Kendall OBE, CEO at the British Beauty Council

The luxury brand licenses are very exciting for both L’Oréal and Kering. And of course, Creed is a solid brand with an incredible legacy. I think that L’Oréal is well placed to develop and expand on the brand profiles and ensure they have a lasting place in the beauty landscape.

It’s a smart move from Kering, and I look forward to seeing what L’Oréal does with these luxury stalwarts.

Jane Cunningham, beauty blogger and journalist

It’s got to sting somewhat that Kering has sold its entire beauty division to L’Oréal for not much more than it paid for Creed fragrances in 2023. Kering’s net debt is huge - crazy numbers - and I don’t see anyone asking how that was allowed to happen in the first place. New CEO de Meo is throwing everything at reducing the debt, but for the consumer, I feel it will be a seamless shift that goes entirely unnoticed.

Currently, Coty holds the license for Gucci Beauty, which ends, apparently, in 2028, when L’Oréal will have free rein over the creative future of the brand for fifty years. It’s a real possibility that the quality of both Creed and Gucci Beauty could be affected with cost-effective ingredient shifts and changes.

Luxury beauty is having its moment. I'm not sure if the momentum is sustainable as more and more brands hop on board the luxury train - there has to be proof of real value and difference for it to continue and for the market not to become homogeneous.

Wizz Selvey, consumer & retail trend analyst 

L’Oréal’s acquisition of Kering Beauté reinforces L'Oréal's dominance in the beauty space. The group already has a powerhouse portfolio, from YSL to Lancôme, and Kering’s brands like Gucci and Bottega Veneta fit well into that ecosystem. What L’Oréal does well is translate luxury fashion brands into scalable, globally resonant beauty lines. The beauty business model is different from fashion, and L'Oréal's deep beauty expertise gives them an advantage to take these brands further. Creed stands out as the jewel in the crown of this deal: a heritage fragrance house with extraordinary brand equity and a loyal global clientele, adding immediate commercial value to L’Oréal’s luxury portfolio.

For Kering, it’s a pragmatic exit. Their experiment in building an in-house beauty arm hasn’t yet matched the speed or expertise of established players like L’Oréal, Estée Lauder, or LVMH. By handing over the reins, Kering can refocus on its core fashion and leather goods business, where it still faces competitive pressures.

The deal also demonstrates just how resilient and lucrative luxury beauty remains. Even in a volatile economy, consumers continue to invest in small luxuries - from fragrance, skincare, and cosmetics - as accessible extensions of the brands they love. Beauty remains the most emotionally connected and repeatable entry point into the world of luxury.

Mel Taylor, beauty brand advisor 

L’Oréal’s acquisition of Kering’s beauty division appears to be a win-win for both companies - and for consumers.

For Kering, it provides an opportunity to refocus on its core business without the distraction and inevitable capital-intensive overheads of running a beauty division. A win for luxury fashion lovers.

For L’Oréal, the deal represents yet another acquisition that builds its impressive brand portfolio, further solidifying its position as a global leader in beauty.

The resulting partnership will combine their specialist expertise, hopefully resulting in breakthrough luxury experiences and products - so, also a win for the consumer.

So, are there any losers? Hopefully not - but maybe just a ‘watch out for’ regarding Creed. Creed is a beautiful, luxury perfume house renowned for its craftsmanship and heritage, so this unique positioning needs to be respected and nurtured to ensure it retains its authenticity within the broader L’Oréal portfolio.