This week, I checked in with two former L’Oréal Group execs to better understand what the L’Oreal and Kering deal means for the beauty and wellness industries. Additionally, Givauden’s sales jump, Ulta Beauty hires a new CFO, and Therabody taps Kendall Jenner as the new celebrity face of its beauty division.
Announced Sunday, L’Oréal Group is set to acquire Kering’s beauty portfolio for $4.6 billion.
“When you see two big giants like this get together, it sends a message to the industry that high-end luxury is back,” said Kimber Maderazzo, professor of marketing at Pepperdine Graziadio Business School and former Proactiv and L’Oréal executive.
“It’s really a win-win [for L’Oréal Group and Kering],” said Nicole Fourgoux, former longtime L’Oréal Group exec and current operating partner at Stride Consumer Partners. “It allows both companies to focus on what they’re really great at, and it strengthens both positions in a way, not only financially, but really in terms of ownership of brands and expertise.”
The deal includes Creed, the luxury fragrance brand Kering purchased in 2023 for $3.8 billion from investment management company Black Rock, as well as a 50-year license to create and distribute beauty brands for Kering’s fashion lines like Balenciaga and Bottega Veneta. It also includes the license for Gucci Beauty after Coty’s existing license expires in 2028.
“Giving a 50-year license sends a clear message that L’Oréal and Kering can actually work together in the long-term interest of the business, both on the fashion side and the beauty side,” said Ariel Ohana, managing partner of investment bank and advisory Ohana & Co, and former advisor for LVMH and Coty. “It’s almost as if they’re saying, ‘We have a beauty division we’re letting L’Oréal manage, but it’s still part of Kering’.”
Fourgoux anticipates L’Oréal to fast-track the expansion of the Creed brand and the creation of beauty lines for Bottega Veneta and Balenciaga. “It’s a very clear signal that [L’Oréal is] betting on the higher end of the market right now, more than the mass or masstige segment, because we haven’t seen activity there in a while,” said Fourgoux. “It’s following the same model that has been successful for L’Oréal [with YSL Beauté], and I think L’Oréal has a very clear vision of what the size of the prize is for those licenses and those brands.”
“As part of L’Oréal Luxe, Creed will be best positioned to accelerate even further its global development across both men’s and women’s markets,” said a release shared by L’Oréal and Kering.
“If L’Oréal says they believe they can grow this brand, they can triple this brand in a relatively short time,” Fourgoux said. “It means that they have huge confidence in their capacity to go faster, and so I think that’s the crux here.”
Maderazzo believes this could also spark a new love for luxury beauty among younger shoppers more accustomed to dupes and masstige. “Gen Zers love high-end luxury goods like handbags and clothing, so I think that’s part of the attraction [of L’Oréal toward these licenses],” said Maderazzo. “They can create beauty brands that leverage the awareness of those brands with that consumer target already, and maybe get those younger consumers into [luxury] beauty.”
Also included in the deal is an “exclusive venture to explore business opportunities in the field of wellness and longevity,” according to the companies.
“This deal is not just for consumer goods. I think we’ll start to see different types of retail centers and stuff like that, that really bring these big brands and high-end experiences to consumers,” said Maderazzo. “We might start seeing Gucci spas.”
However, this could also signal a slowdown in M&A from the industry’s largest company, L’Oréal. “This is L’Oréal’s biggest acquisition, so they need to do this really well,” said Fourgoux. “They need to execute and integrate these businesses really well, so that’s where we’ll see quite a focus.”
Pressures on L’Oréal’s internal infrastructure and supply chains, not lack of funding, will likely cause this slowdown. “L’Oréal will never not look at the M&A market,” Fourgoux said. “If there are interesting assets coming on the market, L’Oréal [will look]. … But I think they will have in the back of their heads the timing and the efforts that it takes to integrate something like this [against their new commitment with Kering].”
However, it’s also a lesson in how difficult it is to spin off a fashion line into a successful beauty brand. “It puts a fine point on what kind of expertise it requires to succeed in beauty at a big scale these days,” said Fourgoux. “All the Kering brands are amazing, with fantastic legacy, but it doesn’t mean it’s easy to launch a high-potential, fast-scaling portfolio.”
Executive moves:
- Ulta Beauty has hired a new chief financial officer. Christopher DelOrefice will take on the role starting in December. He will join the company from medical device manufacturer Becton Dickinson & Company, where he spent four years as evp and CFO. His CV also includes Johnson & Johnson.
- Erica Culpepper is the new president of Cakes Body, the Instagram-famous undergarment brand known for its nipple covers. Culpepper joined the company from L’Oréal Group, where she spent 21 years, most recently as gm of It Cosmetics.
News to know:
- THG, British parent company of beauty retailers Lookfantastic, Dermstore and Cult Beauty, reported a 6.3% sales jump in its third quarter to reach $543 million in sales. This marks the group’s best quarter since Q4 2021. The company trades on the London Stock Exchange.
- Kim Kardashian plans to launch a beauty line under her Skims brand. She announced the news on the “Call her Daddy” podcast last week. Kardashian shuttered her last beauty line, SKKN by Kim, this fall.
- Unilever has sold the Kate Somerville skin-care line, which includes a popular Los Angeles med spa by the same name, to Rare Beauty Brands, parent company of Patchology skincare, Dr Dana clinical nail care, and Gen-Z-coded skin-care brand Dot Dot Dash. Terms of the deal were not disclosed. Unilever purchased the brand in 2015.
- Walmart announced on Tuesday that it has partnered with OpenAI to allow customers to shop directly through ChatGPT. It’s the latest move by the tech provider to offer digital shopping and checkout alternatives to traditional e-commerce. OpenAI, parent company of ChatGPT, announced similar partnerships with Etsy and Shopify last month.
- Kendall Jenner is the new face of Therabody, the wellness tech company launched in 2016 with its signature Theragun. The company has since expanded to beauty with several launches. Jenner will be the face of its new TheraFace Mask Glo, a red light therapy mask that retails for $379 at Ulta Beauty, Best Buy and Nordstrom.
- Mammoth Brands, parent company of shaving brands Harry’s and Flamingo and deodorant brands Lume and Mando, has acquired baby-care line Coterie from its private owners. Terms of the deal were not disclosed.
- American actor and playwright Colman Domingo, whose recent projects include “Euphoria”, “Running Man” and “The Four Seasons”, is Valentino Beauty’s new global brand ambassador for fragrance.
Stat of the week:
Sales at fragrance juggernaut Givauden are up 5.7% year-over-year. The Swiss fragrance and flavor company reported its financial earnings on Tuesday, which included a 5.7% like-for-like lift in sales to reach $7.1 billion during the first nine months of the year. In a release, the company announced it will increase prices in 2026 to offset economic hurdles like tariffs.
In the headlines:
TikTok’s ongoing U.S. uncertainty has marketers rethinking next year’s budgets. As companies drag their feet reimbursing business expenses, Gen Z feels the pain. Walmart deepens relationship with OnePay, a one-stop finance app it helped create. The US may finally get a new sunscreen filter, here’s what it could mean.
Listen in:
This week’s episode of the Glossy Beauty Podcast introduces a three-week series dedicated to beauty packaging. From sustainability to color to font, every packaging element is carefully considered. As our first guest in the series, FIT Professor Sebba Alqetrani, said, “The first thing the consumer sees, touches and interacts with is the package. [It] is your first opportunity to have a first impression.”
Need a Glossy recap?
Everything you need to know about Ulta’s new UB Marketplace. A new wellness concept from a Whole Foods co-founder is quietly gaining traction in L.A. Lancôme is making moves to become every bride’s go-to glam. Olive & June launches kid-sized press-on nails. How Innersense successfully grew its clean hair-care business through salon pros. How to (re)launch a perfume brand. ‘Sephora is everything Amazon is not’: LVMH’s beauty and retail brands are quietly outperforming.
