Burberry shares up on FTSE 100 after acquisition of 50 China stores announced

Shares in fashion retailer Burberry were up on the FTSE 100 in morning trading after the company said it would be buying out 50 franchise stores in China for £70 million.

The group said the move was part of its strategy of unifying the brand worldwide and increasing its exposure to "high growth luxury markets".

Burberry said it expected the transaction to lead to a rise in group operating profit of £20 million in the financial year 2011/12.

Earlier this week Burberry reported a rise in Q1 revenue of 24 per cent to £282 million.

Angela Ahrendts, Chief Executive Officer of Burberry, said, "The acquisition of Burberry's store operations in mainland China will allow us to further leverage our proven brand and business strategies in this high growth luxury region. With a solid foundation of 50 stores across 30 cities, operational expertise and strong brand momentum, this is an optimal time for Burberry to integrate this business.

"Looking forward, we will accelerate growth by further capitalising on nearly 20 years of market presence and our high brand awareness in China. 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."

By 09:18 shares in Burberry were up 3.10 per cent on the FTSE 100 to 815.00 pence per share.