Why Gucci owner Kering is acquiring fragrance label Creed: CEO François-Henri Pinault comments while the French luxury group develops high-end perfumes for its brands like Balenciaga and Bottega Veneta

Jun 28 , 2023

French luxury group Kering acquired fragrance label Creed, known for its men’s perfumes. Photo: @creedboutique/Instagram

Kering SA, the owner of Gucci, has agreed to buy Creed in an all-cash deal as the luxury conglomerate expands in the market for high-end fragrances.

Kering’s beauty unit is buying 100 per cent of Creed from funds controlled by BlackRock Inc. and current chairman Javier Ferran, the Paris-based luxury group said in a statement on Monday. Further terms of the transaction weren’t disclosed.

French luxury group Kering’s logo on its headquarters in Paris, France. Photo: Reuters

Creed was established in 1760 by James Henry Creed as a tailoring house serving the royal families of Europe. It still has family involvement.

The French group said it planned to “unlock” Creed’s potential, particularly in China and travel retail, to expand its feminine fragrance portfolio. The company is known for its men’s fragrance Aventus. Creed generated annual revenue of more than €250 million (US$272 million) in the year leading up to March 31.

Creed is famous for its men’s fragrances. Photo: @creedboutique/Instagram

The acquisition comes after Kering named Raffaella Cornaggia to lead its beauty unit in February as the company aims to grow a segment where rivals such as Hermès International and LVMH Moët Hennessy Louis Vuitton SE have performed strongly.

Kering has been adding cash to its war chest for potential acquisitions, raising significant proceeds from the sale of its Puma SE stake.

Last year, Kering held talks to buy Tom Ford, the designer brand known for its perfume offering, according to people familiar with the matter. A Kering representative declined to comment at the time. Estée Lauder eventually bought Tom Ford.

Models walk on the runway during Gucci’s cruise 2024 collection fashion show at the Gyeongbok Palace in Seoul, South Korea, on May 16. Photo: Reuters

Kering is currently trying to revive its biggest brand Gucci. In April, it revealed that Gucci’s sales barely grew in the first quarter as the Italian label failed to win over more shoppers to products such as Double G belts and furry Princetown slippers. Kering’s performance seemed particularly lacklustre when compared with rivals LVMH and Hermès, which both posted double-digit sales growth in the first quarter.

At the time, CEO François-Henri Pinault said while the performance of Kering was mixed, it was starting to see a “gradual improvement in activity month after month”. In a bid to revamp Gucci, the company named Sabato De Sarno as its new creative director who joins from Valentino SpA.

Kering agreed to buy Creed in an all-cash deal as the luxury group expands its beauty portfolio. Photo: @creedboutique/Instagram

Kering has previously indicated it’s trying to bulk up its beauty segment, but some brand licenses are in the hands of competitors. Coty Inc. has the license for Gucci. In February, Pinault said his group would aim to take the license back when it becomes available again, without saying when that will happen.

In the meantime, Kering will develop fragrances for Bottega Veneta, Balenciaga and Alexander McQueen – brands it owns.

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Fashion

French luxury group Kering agreed to buy fragrance label Creed in an all-cash deal as it expands its beauty segment, competing against LVMH and Hermès, but terms of the transaction weren’t disclosed
CEO François-Henri Pinault says some brand licenses are in the hands of competitors and that his group would aim to take the license back for Gucci from Coty Inc. when it becomes available again