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Coty Inc. shares slipped Wednesday afternoon after a report suggested the sale of the professional division — which the company has counted on in order to pay down debt — may be in peril.

Coty’s stock inched down about 6 percent Wednesday afternoon to $5.46.

Wells Fargo analyst Joe Lachky put out a report saying the “halt of sale” of Coty’s Professional beauty segment was “not a surprise.”

“Coty had originally targeted a deal to be announced by this summer, but we had thought a push-back in timing was likely,” Lachky wrote. “It appears the bidders [KKR and Henkel] want to assess the impact of the COVID-19 related industry shutdown of various distribution channels (especially the salon channel) before committing to a deal. We had also thought the environment could force Coty to execute the sale in multiple smaller transactions versus one large divestiture.…It’s too early to tell whether the transaction is simply delayed or will ultimately be completely called off.”

Lachky’s note was based off of a Reuters report that came out Wednesday. Industry sources have told WWD that talks are “still progressing” with all parties doing virtual or remote due diligence. Henkel did not immediately respond to requests for comment. Coty and KKR declined to comment.

Coty planned to sell the professional division to pay down debt and focus on core categories like fragrance, makeup and skin care. The professional segment has been relatively stable since Coty acquired the assets from Procter & Gamble in 2016, unlike the business’ consumer division, which has required multiple revamps.

Analysts have estimated the Professional division could sell for around $8 billion, but beauty industry sources have said they anticipate valuations broadly will decrease as a result of COVID-19.

For more from WWD.com, see: 

U.S. Prestige Beauty Sales Dip 14 Percent in Q1

Anjac Health & Beauty Acquires Roval Cosmétiques

During Coronavirus, U.S. Cosmetic Seaborne Imports Drop, S&P Says

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