What: Following its first half results and success with Kering Eyewear, the Kering Group is looking to create value within the beauty segment.

Why it is important: While it remains unclear if Kering will launch through licensing or acquisitions, the group is well positioned to expand into the beauty segment.

Kering operates under a licensing model with Coty Inc. with whom they have expressed dissatisfaction in the past for having failed to capitalize fully on the segment. Now, with a free cash flow of 2.05 billion euros in the first half of 2022, Kering is well positioned to make acquisitions. The group announced in 2019 that its M&A search was back on, but it has struck only a handful of small deals since then.

While reports look good as many Kering brands had high sales increases and growth, Gucci, their top performing brand, slowed in comparison due to its exposure in China. The euro’s slide to parity against the U.S. dollar did boost top-line revenues for companies that sell many of their goods abroad like Kering’s brands. In addition, U.S. tourists have taken advantage of the cheap euro to splurge on luxury goods abroad.

Whether through launching a beauty line or diversifying the group’s portfolio with acquisitions, Kering maintains that entering the beauty segment is inevitable.

Kering looks to beauty