Coty and Kering have agreed to terminate their licencing agreement for the Gucci beauty business a year ahead of schedule, clearing the way for L’Oréal to take over the licence in a transaction valued at approximately $400 million. The deal, announced on July 7, restructures one of the most closely watched relationships in the luxury beauty sector and marks the end of a partnership that began in 2016.
Under the terms of the agreement, Coty will receive roughly $400 million and continue to operate the Gucci fragrance and cosmetics license until at least June 30, 2027, ensuring a smooth transition period. The early termination supersedes the original agreement, which was set to run through mid-2028, reflecting what all three parties described as a ‘strategically aligned decision’ to accelerate the transfer.
The deal’s timing is significant. It arrives as the prestige beauty market undergoes a period of recalibration, with consumers in China and the United States tightening discretionary spending while continuing to trade up within fragrance. Gucci’s beauty business, which has performed solidly under Coty’s stewardship, is positioned to benefit from L’Oréal’s superior distribution muscle in Asia and its deep expertise in digital commerce.
For L’Oréal, the acquisition of the Gucci beauty license represents a major victory in its ongoing competition with Coty and Estée Lauder for control of the most desirable luxury fragrance and cosmetics properties. Gucci, one of the few heritage Italian fashion houses without an in-house beauty division, has been widely viewed as the crown jewel of licenced beauty brands, and its addition to L’Oréal’s Luxe division strengthens an already formidable portfolio that includes Yves Saint Laurent, Armani, and Valentino.
For Coty, the $400 million payment provides a welcome infusion of capital as the company pursues its turnaround strategy under new leadership. The loss of the Gucci licence, however, leaves a meaningful gap in Coty’s prestige portfolio that the company will need to fill through a combination of new licencing deals and organic brand development. The coming months will reveal whether Coty can redeploy the capital and creative resources freed by this exit more effectively.
