Cobra, the independent sports retailer, is paying pounds 2m for 31 of the 43 stand-alone Champion stores owned by Burtons. The Champion chain employs 400 people and Cobra will take on those working in the stores it is acquiring.
The remaining stores will either be sold or converted to other Burton outlets, such as Dorothy Perkins and Top Shop.
The group also intends to cut the number of Champion concessions in its Burton stores from 90 to about 30 over the next year, leaving 60 outlets in its Debenhams department store chain.
The closure will cost pounds 5m, which will be included as an exceptional charge in its accounts for the year to 28 August.
The stand-alone Champion stores are expected to have lost pounds 3m in the same period, although Richard North, the group's finance director, said that the concessions in Burton and Debenhams were contributing to the company's profits.
'The closure of Champion as a separate trading division brings immediate cost savings, removing the losses incurred by the solus operation and leaving the sports operation within Debenhams to trade profitably,' John Hoerner, Burton's chief executive, said.
The Champion disposal is the latest in a series of cost-cutting measures carried out by the group as it struggles to improve profits.
Burton's profits were hit both by the recession in the retail sector and by a disastrous foray into property development.
More than 4,000 jobs have gone, partly by employing more part-time staff. Its shares were unchanged at 78p yesterday.