PARIS — Could Kering be plotting a move into beauty?
Reporting first-half results after the market close on Wednesday, the French luxury group said it was looking at the segment, although it did not specify whether it might follow in the footsteps of Hermès International by launching its own beauty line, or whether it was on the hunt for acquisitions.
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Kering currently operates under a license model, with Coty Inc. handling Gucci, Alexander McQueen and Bottega Veneta; L’Oréal holding the rights for Saint Laurent, and Interparfums in charge of Boucheron.
Speaking after the group disclosed that net profit rose 34 percent in the first half versus the same period last year, group managing director Jean-François Palus said Kering was encouraged by the success of its eyewear division, launched in 2015, for which it is targeting revenues of 2 billion euros in the medium-term.
“Regarding beauty, it is a natural extension of our brands’ territory, and you know that currently, we operate under a license model. But our success with Kering Eyewear demonstrates that we can create a lot of value for the brands, on the one side, and as a consequence, for the group, by taking some disruptive and innovative approaches,” he said in a conference call with analysts.
“So beauty is definitely an area where we could contemplate some initiatives in the future and all options are open,” Palus added. There were reports a few years ago that Kering was eyeing The Estée Lauder Cos. Inc. as a potential takeover target, but the reports were never confirmed and, if true, the talks clearly went nowhere.
Palus declined to comment on the duration of Kering’s existing beauty licenses, but the group has in the past expressed dissatisfaction with Coty Inc. for failing to capitalize fully on