Kering is wasting no time in realising its beauty ambitions.

On Monday, the French luxury conglomerate announced it had snapped up Creed, the niche fragrance house known for its Aventus scent, from BlackRock Long Term Private Capital Europe and chairman Javier Ferrán in an all-cash transaction. Reuters reported Kering may have paid up to $2 billion for Creed, which the group said generated annual revenues of over €250 million ($273 million) for the year ending March 2023 and “very high” margins.

The deal is the first major acquisition for Kering Beauté, the company’s four-month-old beauty division headed by longtime Estée Lauder executive Raffaella Cornaggia. The unit is developing beauty strategies in the category for Kering brands including Balenciaga, Alexander McQueen and Bottega Veneta (its two biggest labels, Gucci and Saint Laurent, are locked in long-term licensing agreements). Monday’s acquisition will boost the group’s authority in high-end fragrance.

“Creed has a unique positioning in the fragrance market,” Cornaggia said in a statement. “We see a very compelling rationale and mutual strategic benefits.”

The line instantly provides Kering with scale and hype in the luxury fragrance category. Creed began selling fragrances commercially in the 1970s, but its popularity exploded after the introduction of Aventus in 2010. The fragrance has top notes of bergamot, blackcurrant leaves, apple and pineapple, but minute differences between bottles have fuelled an intense following among collectors and fans. While a 100 ml bottle of Aventus retails at Neiman Marcus for $495, rare batches can easily fetch four figures in the secondhand market.

The acquisition will give Kering vital in-house expertise in the fragrance category. On the one hand, the group is familiar with the fragrance category through its fashion brands, however, it doesn’t have a history of technical know-how to execute on production in house, having licensed production of cosmetics and fragrances out to Coty and L’Oréal.

Investor interest in the booming high-end niche fragrance market at the moment is high: following Puig’s purchase of Byredo last year, there has been a string of activity within the space. Young lines liek Henry Rose, Vyrao and Juliette Has A Gun all recently raised capital. Last week, Advent International acquired a majority stake in Sprecher Berrier Group of Companies, the owner of niche fragrance labels Parfums de Marly and Initio Parfums Privés.

“Luxury fragrance is experiencing very strong growth,” said Rich Gersten, investor and founder of True Beauty Capital. “Investors and buyers are attracted to growth segments so it is not a surprise capital is flowing there.”

Creed’s distribution network also makes it an attractive target for a group like Kering, which in the future may be able to leverage Creed for bargaining power to secure prime shelf space for other brands in its portfolio, said Ilya Seglin, managing director at advisory and investment firm Threadstone Capital.

Meanwhile, having Kering as a parent may help Creed scale to the next level, while retaining its niche positioning and ultra-exclusive DNA. While Creed is a global business, it’s still a niche brand, said Seglin.

Big beauty has a spotty track record when it comes to acquiring small, independent fragrance brands. While some have thrived, including Byredo as well as Le Labo under Estée Lauder, many others have faded under corporate control.

“Kering is a good luxury brand steward,” said Seglin. “Hopefully they can build that business up to be a billion-plus without bastardising it.”