What: Kering acquires a brand and production capabilities by purchasing Creed.

Why it is important:  Niche perfumes and independent brands have allowed department stores to perform well in a pillar category, but, here too, they should expect consolidation.

French luxury group Kering is purchasing Anglo-French perfume house Creed for an estimated EUR 1bn - EUR 2bn. The ultra-luxury fragrance market, which Creed is part of, is growing three times faster than the overall fragrance market and is worth EUR 5bn.

Creed, which generated over EUR 250mn in revenue in the year to March, is likely to have secured a high price from Kering.

This purchase comes after Kering's decision to create an in-house division for its cosmetics and perfumes, improving control over crucial brands. While the acquisition can potentially accelerate the development of Kering's beauty division, concerns exist about it distracting from addressing underperformance in Gucci and using funds that could be allocated for more impactful deals.

Kering purchases Creed niche perfumes