Core Viewpoint - Kering's shares rose over 9% following a narrower sales decline and better-than-expected quarterly earnings Group Performance - Kering reported third-quarter sales of 3.42 billion euros ($3.97 billion), reflecting a 5% decline on a comparable basis year-on-year, an improvement from a 15% decline in the second quarter [2][4] - The company had anticipated group sales of 3.31 billion euros for the quarter, indicating a stronger performance than expected [4] Brand Performance - Sales at Gucci, Kering's largest brand, fell 14% year-on-year on a comparable basis to 1.34 billion euros, although smaller brands showed improvements that mitigated the overall impact [3] - The decline in Gucci's sales represented a significant sequential improvement from the previous quarter, where sales had dropped 25% [3][4] Currency Impact - Kering noted that currency fluctuations posed a "significant headwind," contributing to a 5% negative effect on sales [5] Management Commitment - CEO Luca de Meo emphasized the company's commitment to improving performance, stating that the third-quarter results, while better sequentially, were still below market expectations [5]

Core Insights - Kering Group and L'Oréal Group have announced a long-term strategic partnership in the luxury beauty and health sector, involving L'Oréal's acquisition of the Creed brand and licensing agreements for Kering's renowned brands, with a total deal value of €4 billion (approximately ¥33.2 billion) [1][4][6] Group 1: Strategic Partnership Details - The partnership includes Kering selling its beauty business, including the Creed brand, to L'Oréal, along with a 50-year licensing agreement for Kering's iconic perfume stores [5][6] - Creed, a historic perfume brand founded in 1760, was acquired by Kering for €3.5 billion just four months prior to this new deal [5][6] - L'Oréal will also gain exclusive rights to develop, produce, and distribute Gucci's beauty products, as well as create and distribute fragrances for Bottega Veneta and Balenciaga under a separate 50-year licensing agreement [6][7] Group 2: Financial Context and Implications - Kering is under pressure from both debt and performance issues, with a reported 62% decline in net profit and a net debt of €9.5 billion as of June 2025 [7][8] - The sale of Creed and other businesses is seen as a way for Kering to alleviate financial pressure and refocus on its core strengths [7][8] - L'Oréal's acquisition of Creed is part of its broader ambition to become a major player in the fast-growing high-end perfume market, following several strategic acquisitions in recent years [7][8][11] Group 3: Market Position and Future Outlook - L'Oréal's recent acquisitions, including Aesop for $2.525 billion (approximately ¥17 billion), highlight its aggressive expansion strategy in the luxury beauty sector [8][11] - The partnership is expected to solidify L'Oréal's position as the world's largest luxury beauty company and explore new opportunities in the health sector [11][12]

Core Viewpoint - Kering SA is in negotiations to sell its beauty business to L'Oréal SA for approximately €4 billion ($4.7 billion), marking a strategic move by new CEO Luca de Meo to address challenges facing the luxury brand [1][2]. Group 1: Company Actions and Leadership Changes - The potential sale of Kering's beauty division would be the first major strategic decision under CEO Luca de Meo, who recently took over from Francois-Henri Pinault [2]. - Kering's beauty division was launched in 2023, following the acquisition of cologne maker Creed for an estimated €3.5 billion, aimed at enhancing its beauty platform [4]. - The previous CEO, Francois-Henri Pinault, announced his resignation after a series of profit warnings, with the Pinault family holding a 42% stake and 59% of voting rights in Kering [3]. Group 2: Market Context and Challenges - The discussions for the sale come amid a slump in Chinese demand and the potential impact of higher US tariffs on Kering's business [2]. - The deal could be announced as early as next week, although there is a possibility that negotiations may not reach a conclusion [1].

Core Insights - Kering, the parent company of luxury brands like Gucci and Saint Laurent, confirmed a cyberattack in April that compromised consumer data of potentially millions of customers [1][4] - The hacker group Shiny Hunters claimed responsibility for the breach, stating they have access to 7.4 million unique email addresses [3] - Kering has assured customers that no financial data was stolen, but critical personal information such as names, email addresses, and phone numbers were compromised [2][3] Cybersecurity Threats - The luxury sector is increasingly targeted by cybercriminals, with recent attacks on other major brands like LVMH and Chanel highlighting the vulnerability of high-end retailers [5][6] - The nature of luxury clientele, with spending ranging from $10,000 to $86,000, makes their data particularly valuable for scams and extortion [6] - Cybersecurity is a significant concern for luxury brands, impacting business continuity and brand reputation [9] Financial Impact - Kering reported a 16% decline in sales to $9 billion (€7.6 billion) in the first half of 2025, following a 12% drop to $20.4 billion (€17.2 billion) the previous year [10] - The luxury industry is anticipating a sales decline of 2% to 5% this year, compounding the challenges faced by Kering [10] Technology Investment - Luxury brands are investing more in customer-facing technology (40%) compared to cybersecurity (21%), which may leave them vulnerable [7] - A significant portion of technology investments is directed towards external vendors (68%), potentially creating security risks [7]

Core Points - Kering SA, which owns luxury brands like Gucci, Saint Laurent, and Balenciaga, reported a data breach discovered in June, marking a continuation of cyberattacks in the consumer goods sector [1][2] Company Summary - The breach involved "limited customer data from some of our Houses," and the affected brands promptly informed authorities and customers. Importantly, no financial information such as bank account numbers, credit card details, or government-issued identification numbers was compromised [2] - Kering has implemented measures to secure the affected systems and prevent future incidents [2] Industry Context - This incident follows a series of cyberattacks on retailers in the UK, including a significant hack at Marks & Spencer Group Plc in April that disrupted online delivery for nearly four months. Additionally, Jaguar Land Rover experienced a cyberattack that affected its retail and production activities [3] - A hacking group named ShinyHunters has claimed responsibility for the Kering attack, although this claim has not been independently verified [4]