Gucci will transfer its beauty business to L’Oréal a year earlier than planned, after agreeing with Coty to end its licensing arrangement early.

Kering said Gucci and L’Oréal have signed a 50-year exclusive licence agreement covering the creation, development and distribution of Gucci fragrances and beauty products. 

The agreement will now take effect in mid-2027, a year before Gucci’s existing beauty licence with Coty was due to expire on June 30, 2028.

The earlier transition was made possible after Gucci and Coty agreed to redeem the existing licence. Kering said the move marks another milestone in implementing the beauty and wellness alliance it announced with L’Oréal in October last year.

“Today’s agreement creates value for Gucci, L’Oréal and Coty alike. It accelerates the transition, enabling Gucci and L’Oréal to begin shaping the next chapter of Gucci Beauty,” said Luca de Meo, CEO of Kering. 

“By bringing together two global leaders in luxury and beauty, we are creating the conditions to strengthen Gucci’s reach, influence and desirability across generations and geographies.”

Coty will receive about $400 million from Kering in exchange for the early redemption of the licence, comprising $250 million upfront and up to $150 million by September next year, including a performance-based component tied to the successful transition.

Coty will continue operating the Gucci Beauty business until at least June 30. As part of the agreement, the company will also sell selected Gucci Beauty inventory to Kering to support the transition, while all pending litigation relating to the licence has been resolved.

Coty acquired the Gucci Beauty licence in 2016 and said it has since built the business into a global fragrance and beauty operation. 

Since 2019, Gucci Beauty’s revenue has grown by more than 60 per cent, driven by fragrance collections including Gucci Flora, Bloom, Guilty and Alchemist Garden.