Burberry China buys out minor shareholder
In this article (5)
Fashion brand Burberry China has spent £54 million (US$71.2 million) to take full control of its retail business, buying the 15 per cent interest held by Sparkle Roll Holdings.
Headquartered in London, the 160-year-old label launched its foray in China in 2010. The mainland now accounts for about half the retail spend of Burberry’s Chinese customers. Last year it was relatively stable, but significantly lower footfall again was a challenge in Hong Kong, which accounts for 9 per cent of global retail/wholesale revenue.
Burberry says it has been looking to cut costs to ensure its Hong Kong stores stay profitable, with its first-quarter trading showing improvement over the fourth quarter but comparable sales continuing their double-digit percentage decline, reports DigitalLook.
Like-for-like sales on the mainland were broadly unchanged in the first quarter.
Questions & Answers
Q.Why did Burberry China purchase Sparkle Roll Holdings' stake in the business?
Why did Burberry China purchase Sparkle Roll Holdings' stake in the business?
Burberry China bought out Sparkle Roll Holdings' 15 per cent interest to take full control of its retail business. This transaction cost the company £54 million (US$71.2 million).
Q.How significant is the mainland China market for Burberry?
How significant is the mainland China market for Burberry?
Mainland China accounts for about half of the total retail spend from Burberry’s Chinese customers. Like-for-like sales in mainland China were broadly unchanged during the first quarter.
Q.What challenges is Burberry facing in Hong Kong?
What challenges is Burberry facing in Hong Kong?
Hong Kong experienced significantly lower footfall, posing a challenge for Burberry. The company is looking to cut costs to ensure its stores there remain profitable, despite comparable sales declining by a double-digit percentage.
Q.How did Burberry's first-quarter trading compare to the previous quarter?
How did Burberry's first-quarter trading compare to the previous quarter?
Burberry's first-quarter trading showed an improvement over the fourth quarter. However, comparable sales continued their double-digit percentage decline across the wider business.
Reader pulse
Burberry's full China acquisition: Smart move or too late?
20,575 votes so far