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Gucci, Procter & Gamble Extend Pact

Under its new terms, the license will encompass the entire beauty category, including fine fragrances, cosmetics and skin care products.

MILAN — Gucci is set to broaden its fragrance brand into a full beauty house.

The Italian fashion house, together with its licensee, Procter & Gamble Prestige, announced today they have inked a renewal of their current licensing agreement for the worldwide production, sale and distribution of fine fragrances under the Gucci brand. Under its new terms, the extended license now will encompass the entire beauty category, including the worldwide production, sale and distribution of fine fragrances, cosmetics and skin care products.

Although all the terms of the agreement could not be learned, a statement said the license is long term.

The original agreement between the two parties was signed in June 2006.

Already a hugely successful fragrance business, sources long have speculated Gucci is readying to launch color cosmetics. “We’re well on our way to triple the business for Gucci since we acquired it in 2006,” said Luigi Feola, vice president of Procter & Gamble Prestige, during a recent WWD interview at the global headquarters for P&G Prestige in Geneva. Industry sources estimate the Gucci fragrance business could be generating $500 to $600 million in retail sales worldwide.

A move into makeup could be the springboard that transforms the Florentine fashion house into a full-fledged beauty house. As P&G Prestige focuses on amassing clout in the luxury beauty sector, bolstering Gucci’s beauty offering could be a smart move.

Referring to the parties’ joint success in growing Gucci’s beauty business through blockbuster scent launches including Gucci by Gucci for Men, Flora by Gucci and, most recently, Gucci Guilty, Patrizio di Marco, president and chief executive officer of Gucci, stated: “It is against this positive backdrop that we have decided to renew and extend the scope of our license with P&G Prestige based on a long-term commitment that will allow us to capitalize on this momentum as we take advantage of the significant geographic and category expansion opportunities that exist for the Gucci brand across the beauty segment.”