Luxury news

Gucci luxury fragrances expanding with acquisition of Creed

The brand was established in 1760 by James Henry Creed as a tailoring house serving European royal families and still has family involvement

Creed Aventus scent retails for €333 in Brown Thomas stores

Kering SA, the owner of Gucci, agreed to buy perfume maker 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 group said in a statement Monday. Further terms weren’t disclosed. Kering shares rose 1.5 per cent in early trading in Paris on Tuesday.

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

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

The acquisition comes after Kering named Raffaella Cornaggia to lead its beauty unit in February, as the company aims to grow in a segment where rivals Hermes International and LVMH Moet 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.

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

Gucci Revival

Kering is now trying to revive its biggest brand, Gucci. In April, it revealed that Gucci 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 Hermes, which both posted double-digit sales growth in the first quarter.

Chief Executive Officer Francois-Henri Pinault said at the time that while the performance was mixed, the brand was starting to show “gradual improvement in activity month after month.” In a bid to revamp Gucci, the company named Sabato De Sarno, formerly of Valentino SpA, as new creative director. He’ll unveil his debut collection in September in Milan.

Sabato De Sarno, far left with Pierpaolo Piccioli and Gabriele Cusmano attend The Fashion Awards 2022 at the Royal Albert Hall on December 05, 2022 in London, England. (Photo by Gareth Cattermole/BFC/Getty Images for BFC) Photo by Gareth Cattermole/BFC

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. holds the license for Gucci. Pinault said in February that his group will aim to take the license back when it becomes available again, without elaborating on timing.

In the meantime, Kering will develop fragrances for Bottega Veneta, Balenciaga and Alexander McQueen — all brands it owns — Pinault said.

The Creed acquisition doesn’t register as a surprise given Kering’s plan to grow in the cosmetics sector, and the need to build critical mass ahead of the Gucci license likely returning in-house in 2028, Morgan Stanley analyst Edouard Aubin said in a note after the announcement.

L’Oréal SA also owns the license for the Yves Saint Laurent beauty brand and manufactures the popular Libre perfume. Earlier this year, L’Oréal Chief Executive Nicolas Hieronimus said there was no risk that the license could be taken back by Kering. Yves Saint Laurent is Kering’s second-biggest fashion brand after Gucci.