---
title: L'Oreal Secures 50-Year Gucci Beauty Licence as Coty Exits Early for $400 Million
description: L'Oreal secures a 50-year exclusive Gucci beauty licence from Kering. Coty exits a year early for $400 million in a deal reshaping prestige beauty.
author: Dr Marina Nani (Editor-in-Chief)
date: 2026-07-18T12:51:52.878Z
updated: 2026-07-18T12:51:52.897Z
canonical: https://www.sovereignmagazine.com/article/l-oreal-secures-50-year-gucci-beauty-licence-as-coty-exits-early-for-400-million
image: https://cdn.nanimediahouse.com/loreal-gucci-beauty-licence.png
categories: Business
region: Global
publication: Sovereign Magazine
schema_type: Article
---

L'Oreal has entered a [50-year exclusive licence agreement](https://www.loreal-finance.com/eng/press-release/loreal-enters-50-year-exclusive-worldwide-beauty-licence-kering-gucci-brand) to create, develop, and distribute fragrances and beauty products under the Gucci brand, effective 1 July 2027, following a settlement that ends Coty's existing licence approximately one year ahead of schedule.

The agreement completes a transaction that began in October 2025, when Kering sold its beauty division to L'Oreal for €4 billion. That deal covered licences for Gucci, Bottega Veneta, and Balenciaga beauty, but Coty's separate Gucci beauty licence, due to run until 2028, remained an obstacle. Coty filed suit against Kering and Gucci in November 2025 after the Kering-L'Oreal alliance was announced. The parties reached a resolution announced on 7 July 2026: Kering will pay Coty approximately $400 million in exchange for Coty relinquishing the Gucci licence by 30 June 2027.

Coty will continue to operate Gucci Beauty, which generates roughly $600 million in annual retail sales and grew more than 60 per cent between 2019 and 2025, until that handover date. L'Oreal and Kering have agreed a transition framework to maintain business continuity in the intervening period. Regulatory approvals remain pending.

## How L'Oreal Secured the Gucci Beauty Licence

The path to the licence ran through Kering's broader strategic reorientation. Under chief executive Luca de Meo, who joined from Renault, Kering has moved to concentrate resources on its core fashion and accessories business, divesting non-core operations in the process. The October 2025 sale of the beauty division to L'Oreal for €4 billion was the most significant expression of that shift.

The Coty litigation was the principal remaining complication. Coty had held the Gucci beauty licence since before 2019 and invested in building the business to its current scale. With the licence contractually secured until 2028, Coty had grounds to resist displacement. The [settlement announced this week](https://www.reuters.com/legal/transactional/loreal-favours-early-access-gucci-beauty-licence-kering-coty-work-towards-deal-2026-02-13/) resolves that dispute: Kering absorbs the cost of the early exit, paying approximately $400 million, and L'Oreal gains access to the licence a year sooner than a clean expiry would have allowed.

Nicolas Hieronimus, chief executive of L'Oreal, said: "It is the start of a 50-year journey, a significant additional growth engine for L'Oreal and a new milestone in our partnership with Kering."

## What Coty Receives for the Early Exit

Coty's compensation is approximately $400 million, paid by Kering, in return for surrendering the Gucci licence by 30 June 2027 rather than 31 December 2028. Coty retains operational control of Gucci Beauty and its revenues for the remainder of the licence period. The company had built the business from a base that it describes as more than 60 per cent larger than it was in 2019, with key fragrance lines including Flora and Bloom.

The settlement removes a legal uncertainty that had hung over the Kering-L'Oreal transaction since its announcement. For Coty, the payment represents a negotiated recovery on foregone licence income and, in principle, a cleaner exit from a licence it could no longer expect to retain beyond 2028 in any case.

## What Gucci Beauty Brings to L'Oreal Luxe

L'Oreal Luxe, the division that will house the Gucci licence, already accounts for approximately €6 billion in annual sales and includes Lancome, Yves Saint Laurent Beauty, Giorgio Armani Beauty, Valentino Beauty, Kiehl's, and Aesop. L'Oreal holds approximately 16 per cent of the global fragrance market.

Gucci Beauty adds a brand with strong fragrance heritage and established retail penetration. Cyril Chapuy, president of L'Oreal Luxe, described the acquisition as "an honour and a perfect strategic fit," adding that the Gucci brand "has rewritten the rules of modern luxury with its mix of rich heritage and its highly singular, fashion-forward vision." Chapuy said the combination of Gucci's creative positioning and L'Oreal's operational infrastructure was "set to build a new multi-billion-euro house."

> "Welcoming Gucci Beauty into L'Oreal Luxe is an honour and a perfect strategic fit. The arrival of this iconic brand adds a unique, highly complementary creative energy to our portfolio."
> — Cyril Chapuy, President, L'Oreal Luxe

The 50-year term is notable. A half-century agreement gives L'Oreal the planning horizon to invest in the brand at a scale that shorter arrangements do not support, and it effectively removes Gucci Beauty from the competitive licence market for a generation.

L'Oreal reported group sales of €44.05 billion in 2025 and holds the position of the world's largest beauty company by revenue.

## FAQ

**Q: Is Gucci perfume now under L'Oreal?**
Not yet. Coty continues to operate Gucci Beauty under its existing licence until 30 June 2027. L'Oreal assumes responsibility for Gucci Beauty worldwide from 1 July 2027, subject to regulatory approvals, under a new 50-year exclusive licence agreement.

**Q: What happened to Coty's Gucci licence?**
Coty's licence, originally due to run until 2028, was terminated early by agreement. Kering will pay Coty approximately $400 million as compensation for the early exit. Coty filed legal proceedings against Kering and Gucci in November 2025 following the announcement of the Kering-L'Oreal deal, and this settlement resolves that dispute.

**Q: Which fragrance brands does L'Oreal own?**
Through its L'Oreal Luxe division, L'Oreal holds fragrance licences and brands including Lancome, Yves Saint Laurent Beauty, Giorgio Armani Beauty, and Valentino Beauty, among others. From July 2027, Gucci Beauty will be added to that portfolio under a 50-year exclusive licence. L'Oreal holds approximately 16 per cent of the global fragrance market.

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