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Burberry takes full control of Chinese retail operations

RBR Staff Writer Published 03 August 2016

Burberry has taken full control of its retail business in China, by acquiring the remaining 15% stake it did not own for £54m.

The company first acquired retail operations in China in 2010. It has now confirmed the acquisition of remaining15% economic interest in its China business held by Sparkle Roll Holdings, a non-group company.

Burberry did not reveal any additional details of the transaction.

The company has been taking direct control of several of its overseas operations. In Japan, it ended a licensing agreement with Sanyo Shokai.

Last month, Burberry announced unchanged underlying retail revenue year-on-year. The company is implementing a plan to drive revenue growth and enhance productivity.

The company reported fiscal first-quarter same-store sales declines of 3%. The retailer also said it would close underperforming stores.

At £423m, retail sales in the first quarter were unchanged on an underlying basis and were up 4% at reported FX (Q1 2015: £407m).

Within Asia Pacific, Hong Kong showed some improvement compared to the fourth quarter, but continued to see a double-digit percentage drop in comparable sales.

Comparable sales in China were unchanged year-on-year, impacted by the evolution of the store portfolio in Beijing.

The company expects net new space to contribute low single-digit percentage growth to total retail revenue. About 15 mainline store openings are planned, with a same number of closures.

Image: Burberry Headquarters. Photo: courtesy of Burberry.