What will be next for Kering Beauté?
After months of speculation, the French luxury house in early February said it had begun taking its beauty activity back in-house, and that it appointed Raffaella Cornaggia chief executive officer of Kering Beauté — a new position in a new division.
She was charged with developing a team with expertise in the beauty category for Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin.
At the time, Kering said: “The creation of Kering Beauté will enable the group to support these brands in the development of the beauty category, which is a natural extension of their universe.”
Up until then the buzz had been intensifying about whether Kering would make such a move and if so, what form that might take, especially in regard to jewels in the crown, Gucci and Yves Saint Laurent, whose beauty licenses are held by Coty Inc. and L’Oréal, respectively.
Kering Beauté wasted no time and in late June made the bold move of acquiring Creed, the oldest existing high-end niche fragrance house, in a deal reportedly worth 3.5 billion euros.
François-Henri Pinault, chairman and chief executive officer of Kering, said during a call regarding the group’s half-yearly 2023 results that Creed had revenues of around 250 million euros in 2022, with a very high EBITDA margin.
“We have strong growth opportunities for Creed,” he said, noting the brand has very limited exposure to the Asia Pacific region, little to no presence in travel retail, and room to expand its women’s lines.
The Creed deal came after Kering was in the chase to acquire Tom Ford International, which eventually was bought by that company’s existing beauty licensee, The Estée Lauder Cos. Inc., for $2.3 billion. Kering was also reportedly interested in acquiring luxury brand Byredo, which was snapped up by Puig for an estimated 1 billion euros.
Over the past two decades, luxury goods companies have been taking back full control of the brands they own. That can pack a powerful punch, giving them more consistency, synergies and power.
Today, among Kering’s other owned fashion and jewelry labels, Interparfums runs Boucheron’s business in perfume, while Lalique Group develops Brioni’s fragrance activity.
So what could be next for Kering’s beauty division?
Might Valentino beauty be in the scopes? Kering in late July said it had bought a 30 percent stake in the Italian luxury brand as part of a broader partnership with Qatari investment fund Mayhoola, with an option to buy 100 percent of Valentino by 2028.
Today, Valentino’s longterm fragrance license is held by L’Oréal, which became the licensee on Jan. 1, 2019.
Aside from other acquisitions, there remains huge opportunities for Kering Beauté to grow the brands it already has in-house by strengthening their fragrance businesses and stretching into other categories, such as color cosmetics and skin care.
Source: WWD