The news: LVMH is reportedly exploring a sale of its 50% stake in Fenty Beauty, according to Reuters.

The move comes on the heels of Kering selling its beauty unit to L’Oréal for €4 billion ($4.3 billion)—suggesting that, after years of aggressive expansion, the two luxury conglomerates are taking a more targeted approach to growth.

The rationale: As with Kering’s sale, the potential divestiture appears to be less about Fenty’s performance and more a signal of LVMH’s changing priorities.

• Fenty Beauty generated $450 million in net sales in 2024, giving it a potential valuation in the $1 billion to $2 billion range, sources told Reuters.
• It also has plenty of growth opportunities: In the past six months, the brand debuted in India, launched an exclusive body collection at Ulta Beauty, and signed a sponsorship deal with the WNBA’s New York Liberty.

The market for beauty—particularly cosmetics—is showing signs of softening, which could explain LVMH’s desire to sell. But it’s more likely that LVMH is attempting to raise cash ahead of a potential bid for Armani, which could be valued at as much as €10 billion ($10.8 billion). While LVMH is better positioned than its peers to finance such an acquisition, doing so will require rearranging its balance sheet—and possibly making other divestitures.

What this means: LVMH’s potential sale of Fenty is a sign of a broader shakeup in the luxury beauty industry. Though smaller in scale than Kering’s beauty divestiture, both moves reflect a desire to focus resources on core areas and brands with stronger revenue potential.

That is creating a golden opportunity for L’Oréal and other beauty companies to acquire desirable assets that can help boost sales, either in core categories or emerging ones like fragrance.

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