Kering SA (EPA:PRTP) will sell its beauty business to L’Oreal SA (EPA:OREP) for 4 billion euros ($4.66 billion), the Gucci owner said on Sunday, as it seeks to trim debt and return focus to its core fashion business under new CEO Luca de Meo.
Kering signed a binding agreement with L’Oreal to sell its House of Creed unit to the latter. The deal also includes the rights for 50-year exclusive licenses to develop fragrances and beauty products for Kering’s Gucci, Bottega Veneta, and Balenciaga brands.
The two will also explore more partnerships, Kering said in a statement.
The deal marks major progress in Kering’s attempts at trimming its net debt, which became a major point of concern for investors this year. Kering is grappling with weak luxury demand across key markets including China, which battered sales at its top brand Gucci.
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