At the center of the dispute is Coty’s long-term license to create and distribute Gucci beauty and fragrance, which runs until 2028, and now sits in direct tension with Kering’s newly announced strategic alliance with L’Oréal.
How The Dispute Started
A Coty Inc. subsidiary, HFC Prestige International Operations Switzerland Sàrl, filed a lawsuit in a U.K. commercial court on October 20 against Gucci America Inc., Guccio Gucci S.p.A., and Kering SA over the Gucci beauty and fragrance license that expires in 2028. Public court records classify the case as a general commercial contracts matter, but the specific claims have not yet been disclosed.
Coty has held the Gucci beauty and fragrance license since 2016, giving it nearly 10 years of stewardship over one of luxury’s most coveted fragrance names by the time the license ends.
The Trigger: Kering’s Deal With L’Oréal
Tension escalated after Kering and L’Oréal announced a roughly…
€4 billion($4.66 billion) strategic partnership that gives L’Oréal exclusive rights to create, develop, and distribute Gucci fragrances and beauty products for 50 years, starting once Coty’s license expires in 2028.
The transition to L’Oréal is structured to begin only after the current agreement ends, which both Kering and L’Oréal stressed when the deal was unveiled.
At the time of the alliance announcement, Kering and L’Oréal jointly said that all existing contractual obligations with Coty would be fully honored, signaling that there should be no immediate disruption to Gucci Beauty operations before 2028.
What Coty Is Defending According to Evercore ISI, the Gucci beauty business accounts for around 8% of Coty’s total sales and about 11% of its profits, making it one of the group’s most profitable licenses. Industry estimates suggest that losing Gucci could wipe out roughly 500 million U.S…
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