L’Oréal is set to acquire Kering’s beauty portfolio and the licenses linked to its fashion houses, in a deal valued at around four and a half billion US dollars. The agreement marks a significant moment in the luxury sector, bringing together two French groups that have long influenced the global fashion and beauty landscape.
The move will see Kering – parent company to Gucci, Saint Laurent, and Balenciaga – transfer its beauty operations to L’Oréal, allowing the group to focus more closely on its core fashion and leather goods businesses. For L’Oréal, the acquisition strengthens its position in the high-end segment, adding a suite of established names to its existing luxury portfolio.
As part of the transaction, L’Oréal will take ownership of the House of Creed, a heritage fragrance brand known for its craftsmanship and use of natural ingredients. The agreement also includes long-term licenses to develop and distribute beauty and fragrance products for Gucci, Bottega Veneta, and Balenciaga, following the conclusion of existing contracts.
“This strategic alliance marks a decisive step for Kering,” Luca de Meo, CEO of Kering, stated in a press release. “Joining forces with the global leader in beauty, we will accelerate the development of fragrance and cosmetics for our major Houses, allowing them to achieve scale in this category and unlock their immense long-term potential, as did Yves Saint Laurent Beauté under L’Oréal’s stewardship. Together, we will also venture into new frontiers of wellness, combining the unrivalled expertise of L’Oréal with our unique luxury reach. This partnership allows us to focus on what defines us best: the creative power and desirability of our Houses.”
Beyond beauty, the two companies will establish a joint venture focused on wellness and longevity, combining Kering’s understanding of luxury consumers with L’Oréal’s research and innovation capabilities. In an official press release, the partnership is described as a “50-50 joint venture”.
“I am delighted to forge this long-term strategic alliance with one of the world’s most prestigious, creative and visionary luxury groups. This partnership will further solidify our position as the world’s #1 luxury beauty company and allow us to explore new avenues in wellness together,” said Nicolas Hieronimus, CEO L’Oréal Groupe, in the same press release. “The addition of these extraordinary brands perfectly complements our existing portfolio and significantly expands our reach into new, dynamic segments of luxury beauty. Through Creed, we will establish ourselves as one of the leading players in the fast-growing niche fragrance market. Gucci, Bottega Veneta and Balenciaga are all exceptional couture brands with enormous potential for growth.”
The collaboration represents a strategic realignment for both groups at a time when the boundaries between beauty, fashion, and wellness continue to blur. The outcome of this collaboration – particularly in fast-growing markets across Asia – will be closely watched as the luxury industry adapts to shifting definitions of aspiration and lifestyle.
Why L’Oréal Acquired Kering’s Beauty Portfolio
The acquisition of Kering’s beauty division by L’Oréal is far from a casual corporate shuffle – it is a calculated move that allows both groups to play to their strengths. Kering’s beauty arm has been a weight on the balance sheet: by mid-2025, the conglomerate reported net debt of around €9.5 billion, with the division itself posting a loss of roughly €60 million in the first half of the year, according to Reuters.
Enter L’Oréal, with its mastery of prestige fragrances and luxury beauty. The partnership promises a cleaner, more focused approach for Kering, while L’Oréal gains an immediate boost in high-margin, high-growth categories. As Reuters notes, royalties from the existing brand licenses will ensure Kering continues to enjoy a steady income stream, keeping investors placated while the company pivots back to its core expertise: fashion.
Timing is everything. The deal comes just weeks after billionaire François-Henri Pinault’s Kering appointed Luca de Meo as CEO. Upon taking the helm, de Meo signalled his readiness to make tough decisions to trim debt and streamline operations – a strategy now complemented by this beauty divestment.
In short: L’Oréal secures premium luxury beauty assets with strong growth potential, while Kering gains capital relief, operational simplicity, and a sharper focus on what it does best: building and nurturing some of the world’s most coveted fashion houses.
A Time of Many Changes in the Luxury Conglomerate World
This deal lands amid a flurry of leadership and strategic changes not just at Kering, but across the luxury sector as a whole. In September 2025, Kering brought in Luca de Meo, formerly of Renault, as CEO – a clear signal that operational discipline and a turnaround agenda were top priorities.
At the group’s flagship brand, Gucci, the shake-up is particularly striking. Francesca Bellettini stepped in as CEO, taking over from Stefano Cantino, while Demna, formerly of Balenciaga, assumed the role of creative director, bringing a fresh, bold vision to the brand’s DNA. But the reshuffle doesn’t stop there: Pierpaolo Piccioli was appointed as creative director in May, Louise Trotter took the reins at Bottega Veneta in December 2024, and numerous other leadership changes have rippled across Kering’s portfolio.
And Kering is far from alone. The first quarter of 2025 alone saw over a dozen executive or creative appointments across major luxury houses, highlighting how the industry is recalibrating at both the top and creative levels.
Taken together, the L’Oréal-Kering transaction and these leadership shake-ups are part of a wider realignment in luxury business models, where agility, efficiency, and clear premium positioning are no longer optional – they are essential.
How This Will Affect Asia
Asia – particularly Greater China – remains both the prize and the puzzle for luxury brands. For L’Oréal, the acquisition of Kering’s beauty portfolio comes at a moment when Asia’s prestige fragrance and skincare markets are booming. Emerging wealth, digitally native consumers, and a growing appetite for high-end wellness and beauty experiences have made the region one of the fastest-growing segments globally. In 2025, Asia’s fragrance market is projected to reach a staggering US$12.75 billion – already outpacing the United States, which is expected to generate US$9 billion in the same year, according to Statista. Japan, with its traditional appreciation for scents like cherry blossom and green tea, offers both a steady base and a testing ground for innovation.
Wellness, too, has become a powerhouse in the region. The Asia-Pacific wellness tourism market is estimated to reach US$187 billion in 2025 and to US$290 billion by 2030, with a compound annual growth rate of 9.1 percent, per Mordor Intelligence. Regions like India are expected to register the highest CAGR, notes Grand View Research, while the largest segment is health risk assessment; and the fastest growing segment is stress management.
BurdaLuxury’s Lens
The L’Oréal–Kering partnership is more than a routine corporate transaction – it could redefine the contours of luxury beauty. By combining L’Oréal’s operational expertise in high-margin fragrance and skincare categories with Kering’s stable of heritage luxury brands, the deal positions both groups to capture growth in an era defined by experience, wellness, and premiumisation.
In Asia, where consumers increasingly seek products that merge tradition, quality, and innovation, this partnership is particularly timely. Luxury beauty is no longer just about scent or skincare; it’s about creating immersive, lifestyle-driven experiences that resonate with digitally savvy, affluent audiences.
The collaboration is also a template for the broader luxury sector: divesting non-core operations, streamlining leadership, and doubling down on categories with global growth potential. In other words, it is a bold move that could set a precedent for how heritage fashion houses approach beauty, wellness, and lifestyle in the twenty-first century.
