Luxury retailer and brand Burberry has agreed to buy 50 stores in China from its franchisee in a deal worth £70m.
Burberry said the deal to acquire the assets from its master franchisee, Hong Kong-based Kwok Hang Holdings, was in line with its strategy of unifying the international brand offer and increasing its exposure to retail and to high-growth luxury markets.
Burberry expects the acquisition to add up to £20m to group operating profit in the financial year 2011/12.
Chief executive Angela Ahrendts said: “The acquisition of Burberry’s store operations in mainland China will allow us to further leverage our proven brand and business strategies in this high growth luxury region. With a solid foundation of 50 stores across 30 cities, operational expertise and strong brand momentum, this is an optimal time for Burberry to integrate this business.
“Looking forward, we will accelerate growth by further capitalising on nearly 20 years of market presence and our high brand awareness in China. We plan to drive productivity in existing stores and open new stores, while rapidly implementing our digital marketing initiatives to further reinforce the brand in this exciting market.”