L’Oréal would acquire fragrance brand Creed and gain rights to develop beauty products tied to Kering’s fashion labels, including Bottega Veneta, Balenciaga, and McQueen, the Journal reported, adding the deal could be announced next week.

Kering, controlled by the French Pinault family, launched its beauty division in 2023, the year it acquired high-end fragrance label Creed for €3.5 billion (US$4 billion) in cash.

Kering declined to comment and L’Oreal did not immediately respond to a Reuters request for comment.

A sale would be a major step forward by new CEO Luca De Meo, who officially took office in September, to address a high-debt issue that had sparked investor anxiety.

Kering’s net debt was €9.5 billion at the end of June.

The company has struggled to reverse slowing sales at its largest brand Gucci as the luxury market has been hard hit by lower consumer demand, especially in China, which had led growth in the sector for more than a decade.

Since Kering announced De Meo’s appointment in mid-June, shares in the company have surged by around 60%.

L’Oreal has also been approached by representatives of Armani Group, Reuters reported this month, after the beauty conglomerate was named in the will of late designer Giorgio Armani as one of the preferred buyers for a minority stake in his fashion house.