L’Oreal x Kering Deal “KERING SELLS THE SCENT OF SURVIVAL”. Story by Eleonora de Gray, Editor-in-Chief of RUNWAY MAGAZINE. Photo Courtesy: Kering.

There’s a golden rule in luxury business management, neatly outlined in nearly every CEO’s manual on corporate damage control:
When cash bleeds and your legacy is wheezing, sell the perfume.
Preferably to L’Oréal.

And Kering just did exactly that.

On October 19, 2025, Kering announced with near-theatrical grandeur a “strategic partnership” with L’Oréal, sealing off its beauty division in exchange for a €4 billion consolation prize. The sale includes The House of Creed — its only true niche perfume gem — and 50-year licenses (yes, fifty, not fifteen) to develop and distribute fragrances for Gucci, Bottega Veneta, and Balenciaga. That’s not a handshake — that’s a surrender with royalties.

Let’s decode this:
Creed? Gone.
Future Gucci perfumes? Made by L’Oréal.
Balenciaga’s eau de scandal? L’Oréal.
The next Bottega Veneta scent? Still L’Oréal.

Kering, in effect, is stepping out of the vanity room and hoping no one notices the scent of desperation trailing behind.

The Real Story Behind the Glossy Release

Luca de Meo, freshly instated as Kering’s new CEO (a man with actual automotive and tech strategy credentials, not just a legacy name), described the deal as “a decisive step.” And he’s right — decisively late. The house of Pinault has been limping ever since François-Henri Pinault doubled down on a series of self-inflicted wounds:

• Balenciaga’s PR implosion (no introduction needed),
• Gucci’s identity crisis (Alessandro Michele and Sabato De Sarno are out, Demna Gvasalia is in, and the brand still has no idea who it’s dressing),
• A general aesthetic freefall that’s driven high-value customers — and investors — to the competition.

And now, the final bell: monetizing the only consistently profitable arm left — fragrance and cosmetics. Because when couture starts burning, you bottle up what still sells and hand it to someone who knows how to distribute mass luxury.

This Isn’t Innovation. It’s Liquidation.

L’Oréal, ever the savvy predator in the beauty jungle, wasted no time. Let’s not forget:

• It devoured YSL Beauté in 2008 (after Gucci Group originally owned it).
• Snatched Mugler fragrances and Azzaro from Clarins in 2019.
• Bought Aēsop from Natura in 2023 for $2.5 billion.

And now Creed — the one house with enough gravitas to sit alongside L’Oréal Luxe’s other prize possessions like Lancôme, Armani Beauty, and Valentino.

In other words: when L’Oréal sees a sinking ship, it doesn’t offer a lifeboat — it buys the cargo and sails off.

Damage Control Masquerading as a Partnership

The press release tries to perfume over the rot with fluffy language: “exploring wellness,” “unlocking long-term potential,” “combining innovation capabilities.”

Translation?
L’Oréal will make money.
Kering will make excuses.

The pitch about a “joint venture” in longevity and wellness is a polite afterthought — a fancy way of saying, “We’re trying to stay relevant, please give us five more years.”

And those 50-year licenses? That’s practically forever in luxury terms. No brand bets that far ahead unless they’re exiting the category altogether.

When Heritage Becomes Overhead

This isn’t the first time a luxury group folded its cards:

• Stella McCartney’s beauty license bounced between LVMH and independent hands.
• Prada once let Puig handle all fragrance development before trying (and failing) to bring it in-house.
• Burberry, in a moment of rare clarity, pulled its perfume business back from Interparfums in 2017 — and its profits soared.

Kering did the opposite. It exited the only division that made sense.. and sell.

Because this isn’t about innovation.
It’s about hemorrhaging less.
And hoping no one notices the blood under the eau de toilette.

Final Notes (Base, not Top)

When the family scion steps down and the automotive fix-it guy steps in, the boardroom doesn’t smell like creativity — it smells like risk mitigation.

LVMH isn’t exactly quaking in its Berluti loafers due to being totally isolated from public. Kering is playing catch-up while selling off its best catch.

If this is the future of luxury, someone hand us a sample vial of the past. We’ll take the full bottle, vintage sealed, from a time when luxury meant art, craftsmanship, and leadership… not liquidation.