Kering to sell beauty unit to L’Oreal for $4.66 billion

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Kering to sell beauty unit to L’Oreal for .66 billion — Kering to sell beauty unit to LOreal for 466 billion.jpg

Gucci Owner Kering Sells Beauty Business to L’Oreal for $4.66 Billion

Kering, the owner of Gucci, has announced the sale of its beauty business to L’Oreal for $4.66 billion. This move comes as new CEO Luca de Meo aims to address the luxury group’s high debt and focus more on its core fashion business.

As part of the deal, L’Oreal will acquire Kering’s fragrance line Creed and gain the rights to develop products under Kering’s fashion labels Bottega Veneta and Balenciaga through a 50-year exclusive license.

L’Oreal is acquiring Kering’s fragrance line Creed, and rights to develop other products under the behemoth’s labels. ltyuan – stock.adobe.com

Francois-Henri Pinault, chief executive officer of Kering SA, arrives at a news conference to announce the company’s full year earnings in Paris, France, on Tuesday, Feb. 12, 2019. Bloomberg via Getty Images

This sale is a significant move to reduce Kering’s net debt, which was at $10.5 billion as of June. The company also faces $7 billion in long-term lease liabilities, causing concern among investors.

Kering has been grappling with declining growth at its flagship brand Gucci, largely due to slowing demand in the crucial Chinese market.