• Kering is finalizing a deal to sell its beauty division to L'Oréal at approximately $4 billion valuation
  • The sale represents a strategic pivot for Kering, which had been building its beauty portfolio including the $3.8 billion Creed acquisition
  • Kering's beauty unit showed resilience with 9% H1 2025 sales growth, contrasting with the parent company's 15% overall decline

Kering SA is in advanced negotiations to sell its beauty business to French cosmetics giant L'Oréal SA in a deal that values the unit at around $4 billion, according to people familiar with the matter. The potential transaction signals a dramatic strategic reversal for the luxury conglomerate, which had been aggressively building its beauty capabilities over the past two years.

The talks come just months after Kering established Kering Beauté as a dedicated division in early 2023 and acquired luxury fragrance house Creed for approximately $3.8 billion. The beauty unit manages fragrance and cosmetics lines for brands including Bottega Veneta, Balenciaga, Alexander McQueen, and the recently acquired Creed.

"This would be one of the largest luxury beauty deals since Estée Lauder bought Tom Ford for $2.8 billion in 2022," said one industry executive familiar with the discussions. "For Kering, it's about capital allocation and focus—they're choosing to double down on their core fashion and jewelry businesses during a challenging period."

The beauty division has been a relative bright spot for Kering amid broader struggles. For the first half of 2025, Kering Beauté posted €150 million in sales, representing 9% growth from the same period in 2024. This contrasts sharply with the parent company's 15% overall sales decline, which included a 25% drop at flagship brand Gucci.

Kering had signaled its commitment to the beauty sector through several strategic moves, including the May 2025 issuance of a €750 million bond to fund expansion and the appointment of former Estée Lauder executive Raffaella Cornaggia as CEO of the beauty division. The company had traditionally licensed its major beauty brands to external partners, with Gucci handled by Coty and Yves Saint Laurent by L'Oréal itself.

Efforts to reach representatives from both Kering and L'Oréal for comment were unsuccessful. The companies have not publicly confirmed the negotiations, though sources indicate a deal could be announced within weeks pending regulatory approvals.

The potential acquisition would significantly bolster L'Oréal's luxury portfolio at a time when consumer demand for prestige beauty products remains robust globally. For Kering, the substantial cash infusion would provide flexibility to navigate current headwinds in its core fashion business while potentially accelerating investments in its remaining brand portfolio.

Correction: An earlier version of this article misstated the timing of Kering's bond issuance. It occurred in May 2025.