Burberry, the retailer with more stores in China than any other luxury brand, said Monday it has acquired the remaining 15% economic interest in its Chinese retail business from Sparkle Roll Holdings Limited for £54 million, or about $73.1 billlion U.S.
Burberry is one of the retailers benefitting from Britain’s so-called Brexit vote to leave the European Union. The vote is pushing down the value of the pound, making Burberry’s goods more attractive to upscale consumers with dollars to spend.
Burberry itself that it expects those benefits to continue into next year, with an adjusted retail and wholesale profit injection of £90 million, higher than its May estimate.
Burberry’s move to double down on its China operations is also recognition of luxury’s advantage in that country. Although the once-sizzling growth in China has slowed, retail sales there remain robust, especially among luxury consumers, according to a Bain report last year.
In 2014 and 2015, brands with strong fashion heritage and track record of original designs did better in the Chinese market, Bain found.
And while transitions in China’s economy are causing some turmoil in markets and worry among investors, the general environment for luxury retailers will remain more or less the same—and the still-rising middle class will continue to become more sophisticated about luxury brands, Bain said.
(Source: Retail Dive)