Coty To End Gucci Beauty License Early

Coty Inc. has entered into an agreement to transition the Gucci Beauty license back to Kering for a consideration of approximately $400 million.

Under the terms of the agreement, Coty will continue to operate the Gucci Beauty brand through at least June 30, 2027, ending the license approximately one year ahead of the original license term, officials said.

“This agreement delivers a favorable outcome to conclude the Gucci Beauty license, enabling Coty to redeploy capital and focus on our priority brands,” said Markus Strobel, executive chairman and interim CEO of Coty. “It recognizes the substantial value created in Gucci Beauty under our stewardship and enhances our financial flexibility.”

As part of the agreement, Coty received $250 million in cash at signing and will receive an additional $150 million no later than Sept. 30, 2027, of which up to $30 million is contingent on certain criteria. Coty has also agreed to sell to Kering an amount of Gucci Beauty inventory sufficient to support the transition. Coty estimates cash taxes of approximately $30 million in connection with this transaction.

The transaction proceeds will be used to support debt reduction, investment in its core prestige fragrance and beauty portfolio, and organizational optimization to reflect the new scope of the business. 

Coty acquired the Gucci Beauty license in 2016 and has grown the business into a world-class fragrance and beauty operation with market-leading innovation and internationally recognized campaigns. Since 2019, Coty has grown Gucci Beauty revenues by more than 60%, underpinned by global franchises including Gucci Flora, Bloom, Guilty and Alchemist Garden, according to the company.