British fashion retailer Burberry has announced that it would buy out its franchises in mainland China in a deal worth £70 million.
The announced deal would allow Burberry to take full control of 50 stores from its Hong Kong-based master franchisee Kwok Hang Holdings. China stores are located in 30 cities, including four in Shanghai and nine in Beijing.
Burberry, which operates more than 230 stores around the globe, said that the deal would help them to make the brand more consistent.
Earlier this week, China announced that its economy grew 10.3 per cent during the past quarter. But, Burberry’s chief executive Angela Ahr-endts said that the deal was not hit keeping market conditions in mind and the Burberry brand had more global momentum than ever in the past.
Commenting on the topic, she said, “Regardless of the market dynamics going on, other dynamics are in place to make this the optimum time to do [this deal].”
Angela Ahr-endts further said that the retailer was particularly excited about Chinese market as a large part of the country has cold climate.
Shares in Burberry gained 9½p in the after-hours trading to close at 800p.
Burberry has plans to expand further in China by opening as many as ten new stores in the country this year.