Editor’s Note
This article discusses a significant acquisition in the luxury beauty sector. The information is based on a corporate announcement.
The luxury beauty market has just witnessed a move that could change everything. L’Oréal, the French cosmetics giant, has announced the acquisition of Kering Beauté, the perfumery and cosmetics division of the conglomerate Kering, owner of brands such as Gucci, Balenciaga, and Saint Laurent. The deal, valued at 4 billion euros and valid for 50 years, will allow L’Oréal to exclusively manage the licenses of these brands, solidifying its position as the undisputed leader in the sector.
Since 2023, Kering had begun its own journey in beauty with strategic acquisitions, such as the perfumery Creed, and recent fragrance launches for Bottega Veneta and Balenciaga. However, the sale to L’Oréal reflects a strategic shift: Kering now prioritizes focusing on luxury fashion and accessories, while delegating the management of cosmetics to a player with global experience in the industry.
The beauty business is one of the most dynamic sectors in luxury. According to McKinsey & Co., it has been growing at 7% annually since 2022, and in Spain, the increase in 2024 reached 7.7%, well above the restaurant sector and approaching sectors like tourism. This boom is explained by a shift in consumer perception: cosmetics and perfumery are no longer just elements of vanity but essential components of personal well-being, with a holistic approach combining health, aesthetics, and sustainability.
For L’Oréal, the acquisition is a consolidation move in the face of market volatility. While emerging and viral brands capture consumer attention on social media platforms like TikTok, traditional large groups face the risk of market share erosion. Buying Kering Beauté ensures a steady flow of established luxury products, mitigating risks associated with fleeting trends and establishing an even more solid leadership against competitors like Estée Lauder, Coty, or Unilever.
Among the brands that will come under L’Oréal’s control are strategic licenses for Yves Saint Laurent, Bottega Veneta, Balenciaga, and, eventually, Gucci. The operation also allows for exploring new opportunities at the intersection of luxury, wellness, and longevity, an increasingly relevant area in the high-end cosmetics industry. Both companies have communicated that they plan to create a 50/50 joint venture, aimed at offering innovative luxury experiences, combining L’Oréal’s innovation capabilities with Kering’s deep knowledge of exclusive clients.
The deal comes at a crucial moment for Kering, which is undergoing a restructuring process and seeking to clean up its 9.5 billion euro debt. Simultaneously, L’Oréal reinforces its global dominance: its estimated sales for 2024 reach 43.5 billion euros, almost double those of its closest competitor, Unilever. The acquisition of Kering Beauté also represents a strategic pivot against competition and an opportunity to stabilize its growth in a constantly transforming market.
With this operation, L’Oréal secures unprecedented control over the jewels of luxury cosmetics, while Kering redefines its strategy and focuses on its core business: fashion. The move illustrates how large luxury corporations seek to adapt to a more demanding and connected consumer, where innovation, exclusivity, and experience make the difference.