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Licensing Beauty: Burberry Group inks strategic partnership with Coty

Burberry boss Christopher Bailey said the "combination of the upfront payments and ongoing royalties is financially attractive and is expected to provide an accretive impact to our earnings from FY 2018/19"

Burberry fashion show
The move comes a month after Belgium’s richest man revealed he had bought a stake in the trench coat maker

Luxury fashion group Burberry PLC (LON:BRBY) has unveiled a licensing deal with Coty Inc (NYSE:COTY) as part of a strategic partnership to “accelerate the growth and development” of its Beauty business.

In a statement, the FTSE 100-listed firm said the exclusive licensing agreement with Coty will take effect from October 2017, subject to regulatory approvals. 

Burberry said the move follows “the successful repositioning and elevation of the Burberry Beauty business over the last four years of direct operation.”  

It added: “Leveraging the strengths of each partner, Burberry will lead on creative elements of the Beauty business, while benefitting from Coty's deep beauty industry expertise and first-class global distribution.”

READ: Burberry in fashion ...

Burberry’s chief creative and chief executive officer Christopher Bailey said: "Working with a global partner of their scale and expertise will help drive the next phase of Burberry Beauty's development and position this business for future growth. 

“Further, the combination of the upfront payments and ongoing royalties is financially attractive and is expected to provide an accretive impact to our earnings from FY 2018/19."

Trenching tool ...

The move comes a month after news that Belgium’s richest man revealed he has bought a stake in the British trench coat maker.

Activist investor Albert Frere, worth an estimated £3.9bn, revealed he had taken a 3% interest in Burberry via his Groupe Bruxelles Lambert investment vehicle.

READ: Belgium's richest man takes Burberry stake ...

Burberry shares shot higher on that move as 91-year-old Frere and GBL have a history of squeezing the most out of bosses.

In lunchtime trading today, Burberry shares were 1.3%, or 22p higher at 1,748p, also helped by a note from Swiss broker UBS raising its price target for the firm.

Quick facts: Burberry Group PLC

Price: 1368.5 GBX

LSE:BRBY
Market: LSE
Market Cap: £5.54 billion
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