Burberry buys out China chain

Burberry increased its focus on the Chinese market yesterday after agreeing a £70m deal to buy out its franchise partner in the country.

The move by the luxury goods group will enable it to implement its own customer services, marketing and IT strategy. The chief executive Angela Ahrendts said there was already strong awareness of the Burberry brand, driven by its 50 franchise-run stores in 30 cities. She added: "We plan to drive productivity in existing stores and open new stores, while rapidly implementing our digital marketing initiatives to further reinforce the brand in this exciting market."

Nine of the stores are in Beijing and four are in Shanghai, contributing to total sales of £75m in 2009 and operating profits of £14m. Burberry said the deal was expected to add up to £20m to operating profits in the 2011/12 financial year.