Burberry to buy out franchises

PARIS - Burberry Group Plc, the UK's largest luxury retailer, will take control of its franchised stores in China for 70 million pounds ($108 million) in a transaction that may boost earnings by almost 10 percent.

The acquisition of stores and related assets from franchise partner Kwok Hang Holdings will add as much as 20 million pounds to operating profit in the year through March 2012, the London-based company said on Friday in a statement. Burberry aims to complete the all-cash transaction later in 2010.

"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," Chief Executive Officer Angela Ahrendts said in the statement.