Kering announces a €3.8 billion bond issue

Eva Morletto

By Eva Morletto30 août 2023

The announcement has shaken the world of finance and luxury goods. The Kering group, headed by the Pinault family, has just completed a bond issue worth 3.8 billion euros. The deal is intended to increase the company's financial flexibility and, above all, to finance the acquisition of the top-of-the-range perfume brand Creed.

The Kering group, run by the Pinault family, has just completed a bond issue worth 3.8 billion euros (DR)

The official announcement of this €3.8 billion loan comes shortly after the announcement of the takeover of the historic Creed perfumery, founded in London in 1760 by James Henry Creed, originally a fashion and clothing house, and awarded the title of official supplier to the Royal House by Queen Victoria. Kering formalised the agreement on 23 June with BlackRock Long Term Private Capital Europe and Javier Ferrán, respectively majority shareholder and chairman of the perfume label.

Kering formalised the agreement to buy the Creed brand on 23 June (Creed)

Although the amount allocated for the purchase of 100% of the English brand's capital has not been officially disclosed by the parent company, the Financial Times - citing sources close to the matter - put the figure at €3.5 billion. The deal is part of the French luxury group's strategy of strengthening and renewing itself, with a view to boosting market confidence in Kering after the crises caused by the missteps of Gucci and Balenciaga, and then by the mixed results of the last financial year.

One of Kering's objectives is certainly to broaden the portfolio of brands in the beauty division, a very successful sector. Creed has announced sales of nearly €250 million this year.

The €3.8 billion loan is divided into four tranches (the partial amounts range from €750 million to €1.3 billion and are distributed over different periods ranging from two to twelve years).

The offer was extremely well received by bond investors, confirming the market's renewed confidence in Kering. Its long-term debt is rated "A" by Standard & Poor's with a stable outlook.

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