Kering enters the perfume business

Last February, Kering created Kering Beauté, a new division entrusted to Raffaella Cornaggia, an industry expert who has worked for Estée Lauder, Chanel and L'Oréal and who, supported by a team of experts, is in charge of developing beauty for Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin. At the time of the launch, François-Henri Pinault, president and CEO of the transalpine giant, had already clarified the first objective: an initial focus on perfume to create a platform that would allow, starting with perfume, the development of lines consistent with the image of the different maisons. "It's not just about making the perfumes in-house, but making sure that the image and the promotional investment is in line with the vision and positioning of the brands." And so it has been. Indeed, it is news these days that Kering has acquired Creed, the largest independent global player in the high-end fragrance market.

Founded in 1760, the House of Creed has built a reputation for timeless, versatile, distinctive and sophisticated fragrances, handcrafted in its laboratory in Fontainebleau on the outskirts of Paris using traditional and sustainable methods. The brand, best known for its Aventus perfume, employs 700 people and has a network of 36 mono-brand shops and about 1,400 multi-brand shops worldwide. The company generated annual sales of €250 million last year and was previously controlled by BlackRock Long Term Private Capital Europe and chairman Javier Ferrán.

The acquisition of Creed, which is said to have been made in an undisclosed cash transaction (industry sources estimate it at around $1.5 billion) and is likely to be completed in the second half of 2023, is an important step for Kering Beauté. The French conglomerate itself said as much in a statement, noting that Creed "fits perfectly with its portfolio of renowned luxury brands" and will prove useful as a platform for the future development of other fragrance franchises through the British brand's global distribution network. Pinault said he was excited about this first strategic initiative, which aims to create lasting value for the group and its Maisons. It demonstrates a commitment to building a strong position in the luxury beauty segment, he said, and sets out plans to further develop Creed's potential in new geographies and categories. In particular, Kering could target China, travel-retail and the further expansion of its portfolio of women's fragrances and the body and home categories.

"We are confident that this historic acquisition will facilitate and strengthen our development in fragrances. This is a milestone in the development of Kering Beauté, as we believe more than ever in the strong potential of our brands in beauty."

Jean-François Palus, Chief Executive Officer of Kering, said. What will be the next step for Kering Beauté?