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Feb 22, 2023
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Kering Beauty: François-Henri Pinault wants to emulate the success of Kering Eyewear

Translated by
Feb 22, 2023

With the official announcement on February 3 of the creation of Kering Beauté, which had been in the pipeline for some time, Kering has set up a structure to develop an in-house beauty and perfume offer. A challenge that has been entrusted to Raffaella Cornaggia, former director of the competition Estée Lauder. At the time, it was only specified that the first objectives of this new division would be to develop an offer around the group's brands, namely Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin.

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Asked about this project on the occasion of the group's annual results, François-Henri Pinault gave some details: "We have recruited Raffaella Cornaggia who will develop the platform to develop with the brands, the fragrances, the boxes, the campaigns, with an initial focus on perfume."

No date has been announced for the launch of these first fragrances, but they will concern Bottega Veneta, Balenciaga and Alexander McQueen. Licences that the group did not wish to renew with Coty, a sign that the project has been in place for months within the Parisian group.

"These are licences that expired and that we did not wish to renew in order to internalise them," emphasised François-Henri Pinault. "The aim is to set up a platform that will enable us to develop, starting with perfume, ranges that are very consistent with the image of the houses. It's not just about having the perfumes in house, but that the image, the advertising investments be coherent with the image and the standing of the house. This is where there is frustration today."

The major beauty licence for the group is Yves Saint Laurent, which has been in the hands of L'Oréal since 2008. The license is worth more than €1 billion according to the beauty giant, and its CEO Nicolas Hieronimus recently clarified that it is a "very, very long-term commitment, and there is absolutely no risk that this licence will be taken away from L'Oréal".

A statement confirmed by the Kering CEO.  "It's a long licence," he told reporters, stressing that Saint Laurent is not concerned by a direct takeover. "It is going very well. When I see what we manage to do with the Saint Laurent licence, which is one of the biggest licences in the world today, and then I see what we haven't done with the licences of other brands... That's also why we made the decision to create our own division."

The example of Kering Eyewear

All eyes are now on the Gucci licence, entrusted to Coty, and for which François-Henri Pinault has repeatedly expressed a performance too weak for his liking. For the time being, the executive has not said anything about the possibility of directly taking over this licence, which runs until at least 2028, but he has made it clear that "we have not renewed any licences with a view to creating our own platform. This is a rule that we will apply in the future."

Although the scenario of a buyout seems far from unfeasible. Lacoste, for example, recently chose to leave Coty and to entrust its fragrances to Interparfums. Especially since Kering Beauté does not rule out acquisitions.

"It's a process quite similar to what we did in eyewear," explained the CEO of Kering, who in recent years has acquired the Lindberg and Maui Jim brands. "We are not ruling out this possibility and we are actively looking at possibilities to complete the package. It could be to bring value to the acquisition with our skills or for this acquisition to bring us expertise and accelerate the development of this platform. It's a process that's going to be long. We're announcing it today but don't expect any significant numbers for some time."
The Kering group has nevertheless gained confidence with its eyewear venture. In 2014, the group decided to launch, with Roberto Vedovotto at the helm, a platform to develop eyewear for its brands. Today, the structure produces products for fifteen labels, including the group's own brands as well as those of the Swiss luxury goods giant Richemont and the German sports equipment manufacturer Puma. And its turnover in 2022 jumped by 25% on a comparable basis to 1.1 billion euros. In the same year, the entire Kering group saw its sales rise by 15% to 20.4 billion euros.

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