Gucci to sell beauty unit to L’Oreal for $7 billion
Gucci owner Kering has agreed to sell its beauty business to L’Oreal for four billion euros (AU$7.18 billion) as new CEO Luca de Meo moves to tackle the luxury group’s high debt and refocus on its core fashion business.
According to the agreement, French beauty giant L’Oreal will purchase Kering’s perfume series Creed, as well as the rights to develop products under Kering’s fashion brands Bottega Veneta and Balenciaga under a 50-year exclusive license.
The sale is a significant step towards reducing Kering’s net debt, which stood at 9.5 billion euros ($A17.1 billion) at the end of June, and added six billion euros ($A11 billion) to long-term lease liabilities, raising investor concern.
The company has struggled to reverse declining growth at its biggest brand, Gucci, which has been hit hard by slowing demand in the key Chinese market.
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