Kering Beauté, the recently created beauty arm of luxury powerhouse Kering Group, is to acquire 100% of high-end luxury fragrance house Creed.
The all-cash transaction is expected to close in the second half of this year subject to clearance by competition authorities. Kering Beauté said it will further unlock Creed’s potential across geographies, channels, and categories, notably through the acceleration of the brand’s development in China and in travel retail.
Creed is “under-indexed” in travel retail, it noted. The acquirer will also expand Creed’s feminine fragrance portfolio, body and home categories.
Kering announced the creation of its new beauty products division in February, simultaneously naming the highly regarded Raffaella Cornaggia as Chief Executive Officer.
The deal will see Kering Beauté acquire Creed from funds controlled by BlackRock Long Term Private Capital Europe and current Chairman Javier Ferrán.
The House of Creed, established in 1760 by James Henry Creed, is the largest global independent player in the high-end fragrance market. The house has a wide array of perfumes, led by Aventus.
Kering Beauté said Creed has delivered fast-paced, double-digit growth and remarkable profitability with very high EBITDA margins over recent years, while never compromising on either product quality or brand equity.
For the full year ended 31 March, Creed generated revenue of more than €250 million. The company operates a network of 36 branded stores bolstered by distribution through some 1,400 doors globally, including a modest but growing presence in travel retail.
“The acquisition of Creed is a major step for Kering Beauté,” said the luxury group.
“A perfect fit with its portfolio of renowned luxury brands, it immediately provides Kering Beauté with the required scale, an outstanding financial profile, as well as a platform, supporting the future development of other Kering Beauté fragrance franchises, by leveraging in particular Creed’s global distribution network.”
At a glance
- May 2023 shows month-on-month position movements from the April Index for fragrances.
- Note: These rankings only reflect search demand, not sales. A SKU’s movement upwards or downwards can be influenced by many factors.
- Hover over individual SKUs to show month-on-month movement.
The Jessica’s Secret Index – Top Fragrance Brand Searches May 2023
1. Jo Malone London Wild Bluebell edc
2. Tom Ford Oud Wood edp
3. Byredo Rose of No Man’s Land edp
4. Jo Malone London English Pear & Freesia edc
5. Dior Miss Blooming Bouquet edt
6. Chanel Chance Eau Tendre edt
7. Giorgio Armani Armani Privé The Yulong edt
8. Diptyque Tam Dao edt
9. Creed Aventus edp
10. Chanel Gabrielle edp
11. YSL Black Opium edp
12. Bvlgari Pour Homme edt
13. Frédéric Malle Rose Tonnerre
14. Chanel Chance Eau Fraiche edt
15. Chloé Miniatures Travel Retail Set
16. Hermès Un Jardin sur le Nil edt
17. Jo Malone London Wood Sage & Sea Salt edc
18. Chanel Bleu de Chanel Homme Spray edp
19. Tom Ford Oud Wood Set 50ml+10ml edp
20. Chanel Gabrielle Chanel Hair Mist
{Note the high ranking of Creed Aventus in the latest Jessica’s Secret Index, a partnership between Jessica’s Secret (founded and owned in China by Mirko Wang) and The Moodie Davitt Report, which provides an indicator of what’s hot with the app’s predominantly younger Chinese traveller user base. The results do not represent sales rankings but offer a useful insight into Chinese consumer interest on a monthly basis.}
Kering Beauté said the high-end luxury fragrance segment benefits from strong market dynamics fuelling double-digit growth, high profitability, and significant revenue recurrence, driving long-term resilience through the cycle.
“The beauty category is a natural extension of Kering’s luxury universe, and the Group is confident its expansion in this strategic segment will create lasting value for the Group and its Houses,” the company added.
The all-cash transaction is expected to close in the course of H2 2023, subject to clearance by the relevant competition authorities.
Kering Chairman and Chief Executive Officer François-Henri Pinault commented:“The acquisition of Creed represents Kering Beauté’s first strategic initiative, and demonstrates our commitment to developing a strong position in the luxury beauty segment.
“I am thrilled that today our stories and values come together around this spirit of family entrepreneurship and excellence to accelerate our journey in beauty, and I am delighted that the brand is joining Kering’s collection of luxury Houses.”
Kering Group Managing Director Jean-François Palus added: “The House of Creed is recognised as one of the few leading global luxury fragrance brands, synonymous with exclusivity and creativity.
“We are confident that this landmark acquisition will facilitate and amplify our development in fragrance. This is a milestone in the development of Kering Beauté, as we believe more than ever in the strong potential of our brands in beauty.”
Kering Beauté CEO Raffaella Cornaggia said: “Creed has a unique positioning in the fragrance market. We see a very compelling rationale and mutual strategic benefits in terms of expertise, network, and geographical footprint.
“We look forward to working with CEO Sarah Rotheram and her passionate team to continue to drive Creed’s success worldwide.”
André Bourbonnais, Global Head of Long Term Private Capital at BlackRock, said: “We are pleased and honoured to have partnered with the Creed family and Creed Executive Chairman and BlackRock LTPC Operating Partner Javier Ferrán, who has been critically important in the sourcing of and value creation for Creed.
“Our partnership has helped us to further grow this world-class business through geographic and channel expansion, new product development and a focused marketing strategy.
“This transaction is highly emblematic of BlackRock LTPC’s strategy of investing in high-quality companies and actively collaborating with management teams to create value.”
Dag Skattum, Head of European Office of Long Term Private Capital at BlackRock, said: “It has been a privilege to build on the Creed family legacy and to have partnered with such a dedicated and talented management team, led by CEO Sarah Rotheram, to further strengthen Creed’s iconic standing. We are confident that Kering is the right home for such a unique heritage brand, and that it will continue to thrive under their stewardship.” ✈
