In a move that bridges the worlds of beauty and haute couture, French cosmetics giant L’Oréal has confirmed its interest in acquiring a stake in the iconic Italian fashion house Armani, fulfilling a wish expressed by the late designer Giorgio Armani in his will. The announcement comes as L’Oréal expands its presence in the luxury and cultural spheres.
French cosmetics group L'Oreal said Tuesday it is interested in taking a stake in Italian company Armani, as its late founder suggested, even as it moves ahead with a multi-billion-dollar purchase of Kering's beauty division.
"The acquisition of Kering's beauty activities changes nothing in terms of our intention to be part of Armani," L'Oreal boss Nicolas Hieronimus told Le Figaro newspaper.
L'Oreal and Kering, the struggling French luxury group that owns Gucci, announced on Sunday that L'Oreal was buying Kering's beauty division for $4.6 billion, its biggest acquisition ever.
The deal includes Kering's Creed perfume, and would also see L'Oreal pick up 50-year exclusive licenses to distribute products under Kering's Italian brands Gucci, Bottega Veneta and Balenciaga, once they expire under the current licensee, the US company Coty, in 2028.
Armani's founder, Giorgio Armani, who died September 4, said in his will he wanted a major luxury group to take a 15-percent stake in his privately held company, which Forbes magazine values at $5.6 billion.
Armani cited LVMH, EssilorLuxottica or L'Oreal as potential buyers.
Hieronimus said he saw L'Oreal initially taking a 15-percent stake in Armani.
His cosmetics company was to release its third-quarter results later Tuesday, after the Paris stock market closes.
Analysts consulted by Bloomberg expect it to report a 1.5-percent increase in turnover, to 10.4 billion euros ($12 billion).
The French group is worth more than $240 billion.
L'Oreal's CEO said that the partnership with Kering should send a message to Armani that his group would be a valuable ally in the luxury sector.
Whichever luxury group is permitted to take a stake in Armani would have an opportunity to eventually take control by acquiring between 30 and 54.9 percent of its capital.
If such a scenario does not happen within the next three to five years, Giorgio Armani called in his will for the Armani company to be floated on the stock market.
Hieronimus said that "we could make this (initial) investment in Armani alone, or with a partner".
"My desire is to see Armani fashion develop and for its style to transform under the guidance of its new managing director, Giuseppe Marsocci, whom I know well," he said.
With AFP
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