CHINA: Burberry store acquisition nearly complete
Luxury goods company Burberry is set to complete the purchase of its 50 stores in China in the coming months, with 43 outlets already acquired.
The GBP70m (US$108m) deal with Hong Kong-based franchisee Kwok Hang Holdings, first announced in July, is designed to pave the way for the company to expand its store footprint in China.
Burberry has previously indicated that it believes there is scope to open a total of at least 100 stores in the country, building on its strong brand awareness with a series of digital marketing initiatives.
“This transaction is in line with Burberry’s strategy of unifying the brand around the world, while at the same time increasing its exposure to retail and to high-growth luxury markets,” the company said.
The transaction is expected to add up to GBP20m to group operating profit in the 2011/12 fiscal year.
Sales in the 50 stores reached GBP75m in the year to December 2009, generating operating profit of GBP14m.
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