Gucci owner Kering said on Sunday it has agreed to sell its beauty business to L’Oreal for 4 billion euros ($4.66 billion), in a major shift in strategy by new CEO Luca de Meo as he moves to tackle the luxury group’s high debt and refocus on its core fashion business.

Under the deal, French beauty giant L’Oreal will acquire Kering’s fragrance line Creed, as well as rights to develop fragrance and beauty products under Kering’s fashion labels Gucci, Bottega Veneta and Balenciaga under a 50-year exclusive license.

The licence for Gucci fragrances is currently held by Coty and the new 50-year deal with L’Oreal will commence when that expires, believed by analysts to be in 2028.

The sale is a significant step towards reducing Kering’s net debt, which stood at 9.5 billion euros at the end of

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