New Kering boss pledges ‘tangible rebound’ at luxury group
In a strategic shake-up that could redefine its future, Kering, the luxury group behind Gucci, is reportedly close to selling its beauty division to L’Oréal for around €4 billion. The move marks one of the first major restructuring steps by newly appointed CEO Luca de Meo, signaling a decisive turn toward financial discipline and focus.
A Strategic U-Turn for Kering
Kering’s beauty ambitions began under former CEO François-Henri Pinault, who aimed to build the business internally rather than license it out. That plan led to big acquisitions — most notably, a €3.5 billion purchase of perfumer Creed in 2023. But as growth slowed and debt climbed, priorities have shifted under De Meo’s leadership.
Now, by offloading the beauty unit, Kering seems to be realigning its portfolio toward profitability rather than diversification.
Luca de Meo’s Leadership Vision
Luca de Meo — who took over in September 2025 after a successful stint at Renault — is already making waves. His tenure at the automaker was known for cost-cutting and strategic clarity, boosting Renault’s share price significantly. At Kering, De Meo’s task is tougher: revive Gucci, streamline operations, and reduce a €9.5 billion debt load.
In his September address to shareholders, he stated clearly:
“We will have to continue to reduce our debt and, where necessary, rationalise, reorganise and reposition some of our brands.”
His approach seems to be resonating — Kering’s shares have surged nearly 60% since his appointment was announced in June.
Why L’Oréal Fits the Picture
For L’Oréal, the world’s largest cosmetics company, this acquisition could be a natural fit. With its massive portfolio — from Maybelline to Prada Beauty and Saint Laurent’s fragrance lines — adding Kering’s brands would further expand its dominance in luxury skincare and cosmetics.
The deal could allow L’Oréal to develop new lines for Alexander McQueen and Bottega Veneta, among others. However, Gucci’s beauty license will remain with Coty until 2028, leaving that major brand off the immediate table.
Kering’s Struggles and Market Reality
Once a symbol of unstoppable luxury growth, Kering has stumbled in recent years. Gucci’s sales slump, leadership changes, and multiple profit warnings have left investors uneasy.
In the first half of 2025, Kering’s revenues fell 15% (on a like-for-like basis), and its operating margin dropped to 12.8%, down 470 basis points year-over-year. Even Saint Laurent, the group’s second-largest label, reported softer sales.
Yet, De Meo’s restructuring narrative — and investor optimism — has lifted Kering’s market value to €38 billion.
What This Means for the Luxury Landscape
If finalized, this deal won’t just reshape Kering — it could redefine power dynamics in the global beauty industry. L’Oréal would gain access to some of fashion’s most exclusive labels, while Kering would free up capital to invest in Gucci’s revival and new brand strategies.
For De Meo, it’s more than a sale — it’s a statement. It tells investors and competitors alike that Kering is ready for a leaner, smarter era.
#Kering #LOréal #LuxuryBusiness #Gucci #BeautyIndustry