Coty prepares to hand back the Gucci beauty licence

Coty is preparing to give up its licence for Gucci fragrance and cosmetics, returning the business to owner Kering by mid-2027. According to estimates from Barclays analyst Lauren Lieberman cited by the Economic Times, the move will cost Coty roughly $115 million in annual adjusted EBITDA, representing around 15% of the group's total profit. Gucci has long been one of Coty's flagship licensed brands, so losing it removes a meaningful chunk of earnings from the beauty group's portfolio.

The trade-off is upfront cash. Coty is understood to receive $250 million immediately, with a further $150 million to follow before October 2027. That gives the company a substantial liquidity injection at a time when it can redeploy capital toward its own brands or other licences, even as it loses a marquee name from its shelf. The timing lines up with Kering's broader restructuring of its beauty operations, having agreed last year to sell the Gucci fragrance and cosmetics licence, along with its entire beauty division, to L'Oréal.

The strategic logic is that Kering is consolidating its beauty ambitions under a single, larger partner in L'Oréal, rather than splitting Gucci's beauty licensing across multiple operators. For Coty, the challenge now is proving it can offset the lost profit through its remaining portfolio, which still includes other prestige fragrance licences, while the cash payout buys time. Investors will be watching Coty's next few quarters closely for signs of how it plans to fill the gap Gucci leaves behind.

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