L’Oreal favours early access to Gucci beauty licence as Kering, Coty work towards deal, says CEO

By Dominique Patton and Tassilo Hummel

PARIS, Feb 13 (Reuters) – L’Oreal would welcome gaining access to the Gucci beauty licence earlier than 2028, CEO Nicolas Hieronimus said on Friday, adding that the issue was being discussed between Gucci-owner Kering and current licence holder Coty.

The beauty licence for the Gucci brand was the decisive piece in a deal struck last year between the brand’s highly-indebted owner Kering and cosmetics giant L’Oreal, according to sources familiar with the transaction. 

“We’ll be happy to get the brand sooner,” Hieronimus told analysts at a conference when asked about the licence. 

Gucci is one of the world’s best-known luxury brands but its beauty operations are seen as under-developed by analysts. 

For now, the licence is still in the hands of smaller cosmetics firm Coty Inc. until 2028. 

“It’s something that’s being discussed between Kering and Coty,” Hieronimus said. 

Both Kering and Coty declined to comment. 

Speaking during an earnings call earlier this month, Markus Strobel, Coty’s new chief executive said: “We are always open for deals that create value for us, that create value for our shareholders.”

A source familiar with the matter previously told Reuters that Kering had offered to buy out Coty ahead of sealing the L’Oreal deal, but Coty refused. The U.S. group’s Swiss subsidiary, HFC Prestige International Operations Switzerland, filed a lawsuit in the UK last year against Gucci.

Since then, Strobel has taken over from former Coty CEO Sue Nabi.

Kering in October sold its beauty division built around perfume maker Creed, to L’Oreal for 4 billion euros ($4.75 billion). 

“The reality is that Kering has an asset called Creed that they overpaid for. L’Oreal didn’t want it, which is part of the bride’s dowry,” an industry source said at the time of the deal.

“L’Oreal’s only interest was the Gucci licence.”

($1 = 0.8427 euros)

(Reporting by Dominique Patton and Tassilo Hummel; Editing by Susan Fenton)