British luxury goods firm Burberry Group Plc is eyeing growth in the Middle East through a new joint venture company set up to manage its retail and wholesale distribution in Dubai and Abu Dhabi, as well as Qatar, Oman and Kuwait.

The 15-year agreement has been signed with Burberry's longstanding franchisee, The Jashanmal Group, and has created a new company called Burberry Middle East LLC which is headquartered in Dubai.

Angela Ahrendts, chief executive officer of Burberry, said Jashanmal "has built a very successful Burberry business for over 10 years."

She added that the new venture will give "us the opportunity for an even stronger collaboration in this high growth, under-penetrated market."

Gangu Batra, group president of Jashanmal, said: "Burberry is one of the best known and most popular brands in the region and we see significant opportunities ahead."

The joint venture will enable Burberry and Jashanmal to capitalise more quickly on opportunities in parts of the Middle East while increasing investment in this proven region.

Year-to-date comparable store sales in these countries have increased by over 40%, demonstrating the growth potential of the market.

The first Burberry store in the Middle East opened in 1997 in Dubai under a franchise agreement with Jashanmal.

There are currently eight stores in the joint venture, with a further four planned for the current financial year. Of these, two will be dedicated children's wear stores, a product category which is a key growth area for Burberry.

Burberry Middle East recently opened a flagship store in The Dubai Mall, which carries both Burberry Prorsum and Burberry London Collection ready-to-wear and accessories. It is the first time that Burberry Prorsum men's wear has been available in the Middle East.

The announcement came as Burberry posted a 3% rise in profits for the first half of its financial year.

Revenues soared 20% to GBP539m (US$810m) in the six months to 30 September, but the company warned that trading has become more difficult since start of second half, particularly in the US.