Kering, the French luxury goods conglomerate, last month announced its surprise acquisition of the prestigious fragrance house Creed, in a transaction valued at 3.5 billion euros, according to a report in the Financial Times. Although the exact financial terms of the deal were not disclosed initially, nor confirmed, this valuation sheds light on the magnitude of the acquisition.
The decision to withhold the financial details stemmed from both parties’ reluctance to publicise Creed’s profit margins, said the FT. Nevertheless, it is worth noting that the iconic brand boasted sales exceeding 250 million in its previous fiscal year, indicating a robust financial performance.
This strategic acquisition marks Kering’s inaugural venture into the realm of high-end beauty purchases. Notably, the amount paid by Kering significantly surpasses the 2.5bn euro sum L’Oreal had disbursed for the acquisition of the Australian beauty enterprise, Aesop.
The Financial Times postulated that Creed, established in London in 1760, was likely sold at a premium. This transaction, however, is expected to set a remarkable precedent within Kering’s fragrance portfolio, as the conglomerate actively seeks new avenues for growth and expansion.