Kering issues US$850M bond to support beauty division expansion

Kering has issued a €750 million (US$850.5 million) bond as part of its strategy to strengthen its growing presence in the luxury beauty and personal care market.

The move is part of Kering’s active liquidity management strategy, designed to improve financial flexibility and ensure the company is well-positioned to pursue strategic priorities.

While Kering has not disclosed specific spending plans, the funding is expected to support initiatives within Kering Beauté, the division responsible for developing and managing beauty lines for the group’s fashion brands. These include Bottega Veneta, Balenciaga, and the recently acquired Creed, a high-end fragrance house.

The bond proceeds could help drive product development, marketing efforts, and potential acquisitions as Kering works to establish a stronger foothold in the competitive luxury beauty sector.

Through this issuance, Kering is borrowing money from investors, agreeing to pay them 3.125% interest each year and repay the full amount at the end of the term in 4.5 years.

Investors met the bond issuance with strong demand, signaling confidence in Kering’s financial health. The company holds a long-term credit rating of BBB+ from Standard and Poor’s, indicating that it is considered a relatively low-risk borrower, although it is not in the top tier.

The funding is expected to support initiatives within Kering Beauté.Beauty bets

This latest step underscores Kering’s strategy to expand its beauty portfolio as luxury beauty sees international growth.

Indian cosmetics brand Colorbar also recently made financial decisions amid the steady demand for luxury cosmetics. It announced that it would go public in early 2027 and use the IPO to strengthen its skin care and fragrance lines. The brand will explore acquisitions of domestic and international brands.

In contrast, IFF has taken a reactive financial approach, prompted by recent underperformance and a need to reduce its debt burden. The company announced plans to repurchase a portion of its outstanding investor loans in a scrambling effort to strengthen its balance sheet. 

Companies having to participate in financial recalibration amid shifting market pressures also led to Revolution Beauty rethinking its finances following a sharp sales drop. The brand announced it will cut costs and seek funding before one of its key loans expires in October, but is betting on tariff relief and a leaner product range to support its US recovery in the meantime.