Kering, the world’s second largest luxury goods group, has been tracking the rise of luxury beauty and has been closely watching rival LVMH pull in billions of dollars a year from cosmetics and perfumes.

Valued at 73.3 billion euros (AUD$113.18 billion), Kering’s portfolio includes “magic” fashion brands such as Gucci, Bottega Veneta, Balenciaga and Alexander McQueen and trending jewellers Pomellato and Qeelin.

As beauty industry observers know, the majority of Kering’s beauty licenses are held by Coty. The Gucci fragrance business is worth US$500 million in sales for Coty and the multinational has the lucrative license until 2028.

Kering has announced the launch of a new in-house beauty division called Kering Beauté following several months of rumours and speculation. It’s not the first time the luxury leader has dipped its toes in beauty. The multinational operated a beauty division until the mid-2000s centred on its YSL Beauté brand. The license was sold to L’Oréal in 2008 for over US$1 billion and the world’s number one beauty company has been stoking the brand to global stardom ever since.

With the YSL Beauté and Gucci beauty and fragrance licenses off-limits for now, Kering Beauté will concentrate on developing beauty and fragrance lines for leading brands such as Bottega Veneta, Alexander McQueen and Pomellato.

The multinational has appointed Raffaella Cornaggia as the CEO of Kering Beauté. The Italian-born executive has worked for Chanel and joined The Estée Lauder Companies in 2008. Over the past 20 years, she has held senior positions at M.A.C Cosmetics, Aerin Beauty, Tom Ford Beauty and the core Estée Lauder brand in the US and worldwide.

Based in Paris, Cornaggia will report to Jean-Francois Palus, Group Managing Director of Kering.

Kering is owned by the billionaire Pinault family and is heavily dependent on Gucci, which brings in more than 50 per cent of its annual revenues. The launch of Kering Beauté allows the company to maximise the potential of its other leading brands in a similar strategy to the expansion it pursued in eyewear.

The chairman and CEO of Kering is Francois-Henri Pinault, who has been married to actress Salma Hayek since 2009. He also had a relationship with supermodel Linda Evangelista in the mid-2000s and is the father of her son, Augustin James Evangelista.

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