Kering Sets Gucci Beauty's Future in Motion With L'Oréal Partnership

Kering is not waiting for Gucci's next beauty chapter to begin.

The French luxury group said Gucci has signed a 50-year exclusive beauty license agreement with L'Oréal, bringing forward a transition that had originally been expected one year later. The new agreement is expected to take effect in mid-2027, subject to regulatory approvals and the early redemption of Gucci's existing beauty license with Coty.

Under the arrangement, Gucci and Coty have agreed to bring forward the redemption date of their current beauty license, which had previously been due to expire on June 30, 2028. Coty will receive about US$400 million, with US$250 million expected to be paid in 2026 and up to US$150 million in 2027. Selected inventories will also be acquired as part of the transition process. L'Oréal will pay Kering transition costs amounting to about 70 percent of the early redemption costs and inventories.

The deal is more than a change of beauty partner. It gives Kering a faster route to reposition Gucci Beauty at a time when its largest brand is still trying to regain momentum. Gucci remains the engine of Kering, but that engine has been under pressure. Kering generated 14.7 billion euros in revenue in 2025, while Gucci continued to weigh on the group's performance. In the first quarter of 2026, Kering reported revenue of about 3.57 billion euros, with Gucci sales falling 8 percent to around 1.35 billion euros.

For Kering, beauty offers something luxury fashion increasingly needs: frequency. Handbags, ready-to-wear, and high jewelry remain central to brand prestige, but beauty reaches consumers more often, at lower price points and across a broader geography. A fragrance, lipstick or foundation can become a consumer's first point of contact with a luxury house long before she buys a bag.

That matters to Gucci. After years of inconsistent demand, management changes, and creative transition, the brand is still resetting. Beauty alone cannot fix Gucci's fashion issue. But it can boost the brand's visibility, sharpen its lifestyle universe, and re-inspire younger consumers who may not be ready to buy its higher-ticket products.

Global Gucci sales fell 8 percent in the first quarter of 2026 to 1.35 billion euros. Asia was weaker than North America, and Reuters reported only modest improvement in China, where luxury demand is still low. Gucci uses fragrance and cosmetics to stay close to consumers in one of the world's most important luxury markets.

L'Oréal, meanwhile, reported 6.7 percent like-for-like sales growth in the first quarter, helped by demand in the US, China and Europe. Its scale in premium beauty, product development and distribution gives Gucci a stronger platform to rebuild beauty as part of its broader brand reset.

For L'Oréal, a long-term partnership with Gucci gives the French beauty giant access to one of the world's most famous luxury brands. L'Oréal has the scale, research, product development, marketing, and global distribution to grow a luxury fashion brand into a beauty business.

Kering said the partnership will combine Gucci's global desirability and creative vision with L'Oréal's expertise in beauty, innovation and worldwide distribution, with the aim of unlocking long-term growth across fragrance and beauty.

The clearer interpretation is that Kering is investing to accelerate the process. Instead of allowing the Coty license to expire, Kering is proactively positioning Gucci Beauty within a more robust global beauty framework. In a slower luxury cycle, Gucci's recovery cannot depend only on new bags, new runway messages or a new creative direction. It also needs more frequent, more accessible ways to stay in consumers' lives.

Beauty is now part of that recovery plan.