One year ahead of schedule, L’Oréal has secured the 50-year exclusive global license agreement for Gucci Beauty. Gucci and Coty have decided to bring forward the redemption date of their existing beauty license agreement, previously due to expire on June 30, 2028.
Consequently, the Gucci Beauty license will return to Kering — its beauty unit recently acquired by L’Oréal — for a consideration of approximately US$400 million.
Luca de Meo, CEO of Kering, says: “Today’s agreement creates value for Gucci, L’Oréal, and Coty alike. It accelerates the transition, enabling Gucci and L’Oréal to begin shaping the next chapter of Gucci Beauty a year earlier than planned.”
“By bringing together two global leaders in luxury and beauty, we are creating the conditions to strengthen Gucci’s reach, influence, and desirability across generations and geographies.”
The early redemption hands Coty money to pay debt and double down on its priority brands. It marks a clean break for a company that has been under financial strain, weighed down by a faltering Consumer Beauty unit.
Building a “multi-billion-euro house”
The new license will come into effect on July 1, 2027, following customary regulatory approvals. L’Oréal will then assume responsibility for the development and management of Gucci Beauty activities worldwide.
Until that date, the French beauty giant says it will work with Kering to ensure a smooth transition, with the objective of maintaining business continuity and supporting the continued success of the brand. Kering says the decision is “in line with” the Beauty and Wellness alliance established between the partners in 2025.
According to Kering, the partnership will strengthen Gucci’s desirability and brand equity worldwide.
“By combining Gucci’s global… distinctive creative vision with L’Oréal’s expertise in beauty, innovation capabilities, and worldwide distribution network, the partnership aims to unlock significant long-term growth opportunities across fragrance and beauty,” says Kering.
Nicolas Hieronimus, CEO of L’Oréal, says that the deal is a significant additional growth engine for the company.
Coty exits the Gucci Beauty license after nearly a decade.
The president of L’Oréal Luxe, Cyril Chapuy, adds that Gucci Beauty entering the division is a “perfect” strategic fit.
“The arrival of this iconic brand adds a unique, highly complementary creative energy to our portfolio. By fusing Gucci’s radical edge with our world-class engine, we are set to build a new multi-billion-euro house.”
Coty cashes out
Coty will receive approximately US$400 million for the early redemption of its Gucci Beauty license rights. It collected US$250 million in cash at signing and is due a further US$150 million no later than September 30, 2027. Up to US$30 million of that is contingent on certain criteria being met.
The company will also sell Kering enough Gucci Beauty inventory to support the transition. As consideration for that orderly handover, L’Oréal will pay Kering transition costs equal to roughly 70% of the combined early redemption and inventory amounts.
Coty estimates cash taxes of about US$30 million in connection with the transaction. Coty and Kering have also agreed to settle all pending litigation and related claims over the Gucci Beauty license.
The American multinational beauty company will use the transaction proceeds to support debt reduction, investment in its core prestige fragrance and beauty portfolio, and organizational optimization to reflect the new scope of the business.
Markus Strobel, executive chairman and interim CEO of Coty, says the agreement delivers “a favorable outcome” to conclude the Gucci Beauty license, enabling Coty to redeploy capital and focus on our priority brands.
“It recognizes the substantial value created in Gucci Beauty under our stewardship and enhances our financial flexibility,” he adds.
Coty acquired the Gucci Beauty license in 2016. Since 2019, Coty has grown Gucci Beauty revenues by over 60%. However, while Gucci Beauty flourished, Coty has not experienced a fruitful financial situation over the past few years.
In its Q3 report for this year, Coty posted a net revenue of US$1.28 billion, logging a 1% reported basis decrease and a 7% decrease in LFL. The figure includes an overall estimated 1.4% headwind due to the war in Iran.
During that period, Consumer Beauty sales decreased 4% on a reported basis and 10% on a like-for-like basis. Meanwhile, its Prestige division accounted for 65% of total sales and recorded a net revenue of US$830.9 million.
The poor reflection of Consumer Beauty in Coty’s Q3 financials is not new for the company. Last year, Coty launched a strategic review of its Consumer Beauty division due to a weak fiscal year, marked by a US$381 million loss. The review considered partnerships, divestitures, spin-offs, or other options to strengthen the company’s balance sheets. 
The Gucci Beauty license first returns to Kering before passing to L’Oréal.
Reflecting on luxury beauty
The sped-up Gucci deal reflects how beauty licenses are some of the industry’s most prized assets. In this case, the companies were willing to accelerate an agreement timeline to secure future growth.
The transaction underscores the weight of capital allocation decisions. Coty is exchanging future Gucci revenues for immediate cash.
The move also reflects intensifying competition in prestige fragrance and beauty. L’Oréal is enlarging its luxury portfolio through an iconic addition, while Coty narrows its focus to brands over which it holds greater long-term strategic command.
In a similar prestige company restructuring, Personal Care Insights reported on LVMH’s recent business moves that signal it is trying to cushion the blow of luxury beauty’s slowdown.
The group’s recent and rumored deals involving Fenty Beauty and Remedy revealed how the luxury conglomerate and its affiliates are repositioning in a softening luxury beauty market. The cluster of decisions points to where LVMH is using, or trying to gain, money, and indicates efforts to steady the business.
Meanwhile, the market handed the group a reminder of its exposure to forces beyond beauty. After a proposed US–Iran deal outlined a reopening of the Strait of Hormuz, luxury stocks spiked, with LVMH up about 5%.
Coty exits the Gucci Beauty license after nearly a decade. Coty exits the Gucci Beauty license after nearly a decade. Coty exits the Gucci Beauty license after nearly a decade. The Gucci Beauty license first returns to Kering before passing to L’Oréal. The Gucci Beauty license first returns to Kering before passing to L’Oréal. The Gucci Beauty license first returns to Kering before passing to L’Oréal. The group’s recent and rumored deals involving Fenty Beauty and Remedy revealed how the luxury conglomerate and its affiliates are repositioning in a softening luxury beauty market. The cluster of decisions points to where LVMH is using, or trying to gain, money, and indicates efforts to steady the business.
