CMB Stock News Of The Day 📰🗞️🗞️📈📉

“Kering Cashes Out: L’Oréal Buys Kering Beauté for €4 Billion

Amid Gucci Struggles” 🚨🚨🚨

Kering is stepping back from the beauty business. The French luxury powerhouse announced that it will sell its entire beauty division to L’Oréal in a €4 billion ($4.7 billion) cash deal, marking a swift exit just two years after its ambitious entry into the cosmetics world.

The sale includes Creed — the ultra-luxury fragrance brand Kering acquired in 2023 for €3.5 billion — along with long-term fragrance and beauty licenses for Gucci, Bottega Veneta, and Balenciaga. L’Oréal, already the global leader in beauty, will take full control of Creed and manage the designer labels under 50-year licensing agreements.

For Kering, the move provides a much-needed financial lifeline. The group’s net debt soared to €10.5 billion by the end of 2024 following a string of costly acquisitions and property investments in major fashion capitals. The infusion of fresh capital, coupled with steady royalty income from L’Oréal, could help stabilize its balance sheet as it battles sluggish sales across its portfolio.

The timing also reflects a challenging chapter for Kering’s crown jewel, Gucci. Once the group’s unstoppable growth engine, the brand now faces a steep decline amid a broader luxury market cooldown. Gucci’s revenue plunged 25% in the first half of 2025, with analysts forecasting another 22% drop by year’s end.

The slowdown is part of a wider shift in consumer preferences — as the “quiet luxury” trend drives shoppers toward subtler, heritage-driven labels, leaving once-flashy brands like Gucci and Balenciaga struggling to adapt.

Despite the setbacks, investors reacted positively to the sale. Kering’s shares climbed nearly 4% on Monday, extending their year-to-date gain to 36%. Still, the stock remains down more than 20% over the past three years, underperforming rivals like LVMH and Hermès.

By selling Kering Beauté, the company signals a renewed focus on repairing its fashion core — particularly Gucci — while leaving the beauty crown to L’Oréal, a titan better equipped to reign over the world’s perfume and cosmetics empire.