Kering Acquires ‘Royal’ Fragrance Brand – Creed for Two Billion Dollars

The fashion giant Kering, owner of Gucci, has acquired the niche fragrance brand Creed for an alleged two billion dollars. The majority owner of Creed had previously been the private investment fund BlackRock Inc. and, to a lesser extent, the family of founder James Henry Creed.

In 1760, James Henry Creed founded the House of Creed in London, which initially tailored suits and outfits for members of high society. By the mid-18th century, Henry Creed made the house famous by sewing clothing for the fashion icons of the time – the Count d’Orsay, Queen Victoria, and the French Empress Eugenie, while his successor Olivier began creating unique fragrances for European aristocrats and prominent figures such as the Bishop of Paris.

They built their position in the luxury market precisely thanks to this exclusive business model – perfumes for the wealthy were made to order, and then a small portion of exclusive creations was released for sale.

Problematic Gucci

Today, Creed is one of the symbols of high-quality perfume craftsmanship, a full-blooded niche brand that Kering acquired to, as they stated, ‘unlock its potential,’ primarily in lucrative Asian markets and to expand the women’s fragrance portfolio. Creed’s most popular creation is the men’s fragrance Aventus, and the company generates annual revenues of 250 million dollars.

Kering decided on the acquisition after Raffaellu Cornaggia was appointed head of beauty and announced the expansion of that business segment. For example, Kering was one of the candidates to acquire the brand Tom Ford, which, besides in fashion, has built a fairly stable position in the niche fragrance industry. Ultimately, Tom Ford was acquired by Estée Lauder, and the French Kering turned to market research and new acquisitions.

They have also developed fragrance lines for their fashion brands such as Bottega Veneta, Balenciaga, and Alexander McQueen.

Strengthening their position in the world of luxury cosmetics and fragrance industry seems to be an easier task than reviving their key brand, Gucci. According to financial reports published in April, Gucci’s sales grew weakly in the first quarter, while competitors LVMH and Hermès boasted double-digit growth.

However, they hope that the new creative director Sabato De Sarno will succeed in replicating the success of the former chief creative officer, Alessandro Michele.