L'Oréal Takes Over Gucci Beauty License as Coty Exits Early
L'Oréal has secured the exclusive license for Gucci's fragrance and beauty products, set to take effect in mid-2027, after Coty agreed to terminate its existing license one year early in exchange for approximately $400 million, according to a statement from Kering, the owner of the Italian luxury brand Gucci.
The original licensing agreement between Gucci and Coty, which was set to expire in June 2028, was a key stumbling block in the broader deal announced in October 2025 between L'Oréal and Kering. That deal saw L'Oréal acquire Kering's beauty division for €4 billion, including the Creed brand (purchased 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.
Coty's Early Exit and Financial Terms
Coty, which has been executing a recovery plan this year, relinquished the Gucci beauty license a year early. According to Kering's press release, payments to Coty are expected to be made during 2026 ($250 million) and 2027 (up to $150 million). The statement added: "A selection of stocks will also be acquired as part of the transition process, in addition to the approximately $400 million."
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.
Strategic Partnership and Growth Potential
The partnership includes "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."
L'Oréal CEO Nicolas Hieronimus said at the time of the October deal: "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."
Kering CEO Highlights Value Creation
Kering CEO Luca de Meo, quoted in the press release, said: "The agreement announced Tuesday between Gucci and L'Oréal creates value for each of the parties, whether it be Gucci, L'Oréal or Coty. It accelerates the transition and allows Gucci and L'Oréal to prepare, a year in advance, the new chapter of Gucci Beauty. We are creating the conditions to sustainably strengthen Gucci's reach, influence and desirability across all generations and in all regions of the world."
Gucci's Performance and Future Outlook
Gucci, which represents 40% of Kering's revenue, has experienced a significant decline in sales, dropping from €10.5 billion in 2022 to €6 billion in 2025. During the presentation of his plan, de Meo indicated that the "priority is to make Gucci indispensable again."
L'Oréal Luxe President Cyril Chapuy said in a statement Tuesday: "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."
