The deal is the first major acquisition for Kering Beauté, the company’s four-month-old beauty division headed by longtime Estée Lauder executive Raffaella Cornaggia. The unit is developing beauty strategies in the category for Kering brands including Balenciaga, Alexander McQueen and Bottega Veneta (its two biggest labels, Gucci and Saint Laurent, are locked in long-term licensing agreements). Monday’s acquisition will boost the group’s authority in high-end fragrance.
Creed’s distribution network also makes it an attractive target for a group like Kering, which in the future may be able to leverage Creed for bargaining power to secure prime shelf space for other brands in its portfolio, said Ilya Seglin, managing director at advisory and investment firm Threadstone Capital.
The acquisition will give Kering vital in-house expertise in the fragrance category. On the one hand, the group is familiar with the fragrance category through its fashion brands, however, it doesn’t have a history of technical know-how to execute on production in house, having licensed production of cosmetics and fragrances out to Coty and L’Oréal.
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