L'Oréal Signals Strong Interest in Armani's Future Post-Kering Deal
L'Oréal has publicly affirmed its readiness to engage in discussions with the Armani group regarding the future of the iconic fashion house. According to Nicolas Hieronimus, CEO of the cosmetics giant, L'Oréal is prepared to consider a proposition outlined in Mr. Giorgio Armani's will, which envisages an initial 15% stake in the group. This declaration comes on the heels of L'Oréal's significant strategic move: the €4 billion acquisition of the luxury group Kering's beauty division, announced recently.
Despite this historic acquisition, L'Oréal maintains that its intent and financial capacity to support the Armani group remain entirely unchanged. Hieronimus explicitly stated in an interview that the integration of Kering's beauty business does not alter their commitment to Armani. He emphasized that this partnership with Kering is seen as a move that strengthens L'Oréal Luxe across the entire beauty ecosystem, a benefit that will naturally extend to Armani. L'Oréal currently holds the successful Armani beauty licence, which alone generates sales totaling €1 billion, underscoring their long-standing and profitable relationship. To ensure continued focus, a dedicated team will remain responsible for managing the Armani brand within L'Oréal's portfolio.
The roadmap for the Armani group's future was meticulously laid out in Giorgio Armani's will, which came to light following his passing on September 4th. The will stipulates that his heirs should sell a 15% stake to a prominent fashion or luxury player – naming LVMH, L'Oréal, or EssilorLuxottica as potential candidates – within 12 to 18 months of the will's opening. This initial sale would then pave the way for the chosen shareholder to potentially gain control of the group, one of the few remaining independent luxury entities, by acquiring an additional 30% to 54.9% of the remaining capital within three to five years. Should this second phase of the sale not materialize, the designer's will requests that his company be listed on the stock exchange.
Addressing L'Oréal's strategic approach to such investments, Nicolas Hieronimus clarified that while "it is not our role to be a fashion operator," this perspective does not preclude strategic minority stakes in fashion ventures, citing their approximately 10% investment in Jacquemus as an example. He added that L'Oréal is flexible in its approach to a potential Armani investment, indicating that they "could make this investment in Armani on our own or with a partner." Hieronimus also expressed his personal desire for "Armani fashion to grow and its style to evolve, under the leadership of its new CEO, Giuseppe Marsocci, whom I know well," signaling L'Oréal's broader interest in the brand's creative direction and business development.
In parallel with these strategic discussions, L'Oréal is also preparing to announce its third-quarter sales figures. Analysts, according to a Bloomberg consensus, anticipate an increase of 1.5% in sales, reaching €10.4 billion. These strong financial projections further underpin L'Oréal's capacity and confidence as it navigates both its largest acquisition to date and potential future investments aligned with its long-term luxury strategy.
