Gucci-owner Kering has agreed to sell its beauty business to L'Oreal for €4 billion ($4.7 billion) in a strategic shift by new CEO Luca de Meo, who is trying to cut the luxury group's debt and refocus on its fashion business.

What is this sale about?

The sale, which includes fragrance line Creed and long-term fragrance licences for Bottega Veneta, Balenciaga and Gucci, is a big step in cutting Kering's debt, a key investor concern.

"The proceeds will strengthen the balance sheet and support deleveraging, adding to the €1 billion reduction in net debt already achieved in the first half of 2025," Juliane Barthold and Stoyan Toshev from Frankfurt-based brokerage Metzler told Reuters in an email.

Royalties from these brand licenses will ensure a continuing income stream from the beauty s

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