Burberry (LON:BRBY) has inked a deal to acquire a luxury leather-goods business, the blue-chip company has said. The move comes as the retailer prepares to update investors on its full-year performance on Wednesday.
Burberry’s share price has been little changed in today’s session, having lost 0.08 percent to 1,804.00p as of 14:11 BST, marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.26 percent lower at 7,704.82 points. The retailer’s shares have added just under 10 percent to their value over the past year, as compared with a near four-percent rise in the Footsie.
Burberry adds leather-goods unit
Burberry announced in a statement today that it had entered into an agreement to acquire a luxury leather-goods business from longstanding Italian partner CF&P. The parties have not disclosed the financial details of the deal which is expected to complete later this year.
“This acquisition is a major milestone for us and a statement of our ambition in this strategically important category,” the FTSE 100 group’s chief executive Marco Gobbetti commented in the statement. The move comes with Gobbetti looking to shift the luxury goods retailer further upmarket.
“The challenge for Burberry in launching its new medium-term strategy to climb back up the luxury pyramid has been the fact that it is inherently weak in a core product area: leather goods,” analysts at Jefferies said in a note, as quoted by Reuters, adding that the Italian deal was a welcome move.
Retailer to post results this week
Burberry is scheduled to post its preliminary results on Wednesday and City A.M. reports that while the retailer is expected to unveil near-flat annual revenues of £2.73 percent, analysts forecast steady growth of around three per cent in comparable sales. The newswire notes that analysts also forecast an increase in Burberry’s dividend to 40.64p.