Gucci Parent Company Acquires French Luxury Perfume Brand 'Creed'

Targeting the Luxury Entry-Level Perfume and Cosmetics Market

Creed, the high-end perfume brand used by King Charles III of the United Kingdom at his coronation, is joining the French luxury group Kering. Kering Group, which owns the Italian luxury brand Gucci, plans to acquire Creed to strengthen its cosmetics and perfume business, which serves as an entry point for consumers into the luxury market, and to expand its luxury empire.

On the 26th (local time), Kering Group announced that it would acquire the French luxury perfume brand Creed from BlackRock. This is the first acquisition since Kering announced earlier this year that it would start a cosmetics business. Rafaela Cornaz, CEO of Kering Beauty, stated, "This acquisition is an important step for Kering Beaut? (Kering's beauty division) to make a new leap forward in this (cosmetics) business sector."

Kering Group did not disclose the specific acquisition price. The market estimates it to be between 1 billion and 2 billion euros. However, since Kering is acquiring Creed entirely with cash, the acquisition process is expected to be completed by the second half of this year.

Creed is a luxury perfume brand with a 263-year history, founded in 1760 by James Henry Creed in London, England. King Charles III used Creed perfume at his coronation. King George III was also one of Creed’s customers. Currently, its headquarters are in Paris, France, and it operates 1,400 general stores and 36 brand stores worldwide. Following Jo Malone, a British perfume brand owned by cosmetics company Est?e Lauder, Creed ranks second in sales in the luxury perfume sector. Its revenue for the fiscal year ending in March this year was 250 million euros.

The Wall Street Journal (WSJ) analyzed that cosmetics and perfumes have become the gateway for consumers to enter the luxury market, leading luxury companies to directly enter the beauty business. According to consumer patterns where customers purchase perfumes priced around $100 before moving on to luxury bags costing thousands of dollars, the luxury industry’s strategy has shifted. Until now, luxury companies have not directly engaged in the beauty business such as cosmetics and perfumes but have entered the related business by licensing their brands to third parties.

Kering acquired Creed to strategically utilize this consumer pattern. Jean-Fran?ois Palus, Managing Director of Kering Group, explained, "The cosmetics business is a sector that naturally expands from fashion and accessories. That is why we acquired (Creed)."

The luxury market is currently experiencing rapid growth. After the COVID-19 pandemic, sales of beauty and perfumes are recovering quickly. While sales of mass-market products are under pressure due to concerns about inflation and economic recession, demand for premium brands is explosively increasing. Kering announced plans to expand sales of Creed’s women’s products, candles, and home fragrances, and to drive expansion in the Chinese market.

This content was produced with the assistance of AI translation services.