Kering is putting beauty at the center of its next phase of growth, but not in the way many expected.
At its Capital Markets Day in Florence on Thursday, the group made clear that beauty will sit within “Kering Next,” a newly defined division focused on expanding into adjacent categories and unlocking long-term value beyond fashion. The move formalizes what has been building over the past few years: Beauty is no longer a licensing afterthought; it’s a strategic lever tied to scale, distribution and recurring revenue.
“The full beauty potential of our brands” was a recurring theme throughout the presentation, alongside a more pragmatic acknowledgment: Kering does not intend to build that business alone.
Instead, the company is doubling down on its partnership with L’Oréal, first announced in October 2025, positioning it as the fastest and most efficient way to scale its brands globally. The deal reframes how Kering approaches beauty at a structural level.
The logic is straightforward. Beauty, unlike leather goods or ready-to-wear, is a category where research and development, media, investment, and distribution infrastructure determine outcomes. In Kering’s view, those capabilities are best accessed through an established player rather than built internally.
As CEO Luca de Meo put it during the presentation, the partnership offers “immediate access to the most advanced beauty platform in research and development, global distribution, as well as an unmatched media reach,” adding that it will position Kering’s brands for “accelerated growth and long-term success while delivering meaningful royalty potential.”
Executives pointed to the performance of Yves Saint Laurent Beauty as proof of concept. The business, operated by L’Oréal, now generates roughly €3 billion in annual revenue, or about $3.2 billion, a benchmark that Kering framed not as a ceiling but as an indication of what its own brands could achieve at scale. Gucci, in particular, was highlighted as having “very substantial” long-term potential once its current licensing arrangements expire and can be folded into the new structure.
“The extraordinary success that L’Oréal has built with Yves Saint Laurent Beauty is the clearest demonstration,” de Meo said. “This is a benchmark of possibility, not a ceiling.”
The change in strategy marks a departure from Kering’s earlier approach, which leaned more heavily on in-house development and selective launches. Over the past three years, the group has been laying the groundwork through acquisitions such as Creed in 2023 and initial fragrance rollouts for Bottega Veneta and Balenciaga. But of those efforts, while foundational, were framed as insufficient to unlock the full opportunity.
“The choice we made is therefore a value-driven decision: faster growth, significantly lower capital intensity and a far more powerful way to support our houses over the long term,” de Meo said.
The L’Oréal partnership changes the financial model. Rather than carrying the full operational burden, Kering stands to benefit from royalties, lower capital intensity and faster market entry.
Internally, the decision is being positioned as a trade-off, with less control in exchange for speed, scale and profitability.
For L’Oréal, the deal reinforces its dominance in luxury beauty, adding another slate of high-potential brands to its portfolio. “This is a true win-win partnership,” L’Oréal Group CEO Nicolas Hieronimus said during the presentation. “It represents a strategic reinforcement of our luxury leadership and creates a powerful engine for increased growth and profits for Kering.”
The implications extend beyond Kering. The move underscores a growing divide in the beauty industry between brands with access to global infrastructure and those without.
That split is already playing out. LVMH operates a fully integrated model through Parfums Christian Dior and its Sephora retail network, while Estée Lauder Companies scales brands like Tom Ford Beauty through its global supply chain and marketing engine. At the other end, licensing remains a common route: Coty runs beauty for Gucci Beauty and Burberry Beauty, giving brands reach without building infrastructure.
As scale becomes more critical, partnerships like this one are increasingly shaping who can compete at the top end of the market.
Kering is also betting that beauty’s next phase will extend beyond traditional categories. The group pointed to wellness and longevity as a $6.5 trillion market, positioning it as a natural extension of luxury’s focus on experience and self-optimization rather than ownership.
“Living longer and aging better is becoming the ultimate need for affluent people,” de Meo said, noting that existing offerings remain fragmented and often fall short of luxury expectations.
Rather than launching standalone products, Kering’s approach centers on services: subscription-based programs, continuous monitoring and high-end, experience-led concepts designed to integrate into clients’ daily lives. The ambition is to combine its expertise in brand-building and client experience with L’Oréal’s scientific capabilities to create more holistic offerings over time.
“This partnership gives us a strong foundation,” de Meo said. “What matters now is how we build on it.”
