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Photo: Italian brand Gucci and the L'Oréal group have signed a 50-year beauty licensing agreement/AFP
The licensing agreement between Gucci and Coty, which will receive approximately $400 million in return, was set to expire in June 2028, according to a statement from Kering, the owner of the Italian brand Gucci. The new license with L'Oréal is expected to take effect in mid-2027. This was the stumbling block in the agreement reached in the fall of 2025 between L'Oréal and Kering, which provided for the acquisition of the latter's beauty division by the world's number one cosmetics company: the flagship brand Gucci was still under license with Coty. The agreement included the sale of the Creed brand (acquired by Kering for $3.5 billion) and the Bottega Veneta and Balenciaga beauty licenses. L'Oréal has held the Saint Laurent beauty license since 2008. The American group Coty, which embarked on a recovery plan this year, finally relinquished the Italian brand's beauty license a year in advance for approximately $400 million, with payments expected to be made during 2026 ($250 million) and 2027 (up to $150 million), according to the Kering press release. "A selection of stocks will also be acquired as part of the transition process, in addition to the approximately $400 million," it added. L'Oréal will pay Kering an amount covering approximately 70% of the early termination costs and inventories, in consideration of Kering's ordered implementation of the transition of the existing licensing agreement. The French luxury group Kering, which has been struggling for several years with the difficulties of its flagship brand Gucci, sold its beauty division, created in 2023, to its compatriot L'Oréal for 4 billion euros in October. Several billion euros in revenue The partnership included "the rights to enter into an exclusive 50-year licensing agreement for the creation, development and distribution of Gucci's fragrance and beauty products, starting after the expiry of the current license with Coty". "The addition of these extraordinary brands perfectly complements our existing portfolio and significantly expands our presence in dynamic new segments of luxury beauty. Gucci, Bottega Veneta and Balenciaga are all exceptional couture brands with enormous growth potential," said L'Oréal CEO Nicolas Hieronimus at the time. The agreement announced Tuesday between Gucci and L'Oréal "creates value for each of the parties, whether it be Gucci, L'Oréal or Coty," said Kering CEO Luca de Meo, quoted in the press release. "It accelerates the transition and allows Gucci and L'Oréal to prepare, a year in advance, the new chapter of Gucci Beauty," he added, "we are creating the conditions to sustainably strengthen Gucci's reach, influence and desirability across all generations and in all regions of the world." The Gucci brand, which represents 40% of Kering's revenue, has gone from 10.5 billion euros in sales in 2022 to 6 billion euros in 2025. During the presentation of his plan, the new CEO, Luca de Meo, indicated that the "priority is to make Gucci indispensable again". L'Oréal Luxe President Cyril Chapuy said in a statement Tuesday from the world's number one cosmetics company that "by merging Gucci's radical audacity with our global reach, we are laying the foundations for a house ready to generate several billion euros in revenue.
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