LONDON (dpa-AFX) - Burberry Group plc (BRBY.L) announced a strategic partnership with Coty to accelerate the growth and development of its Beauty business. Burberry will lead on creative elements of the Beauty business, while benefitting from Coty's industry expertise and global distribution. The licensing agreement will take effect from October 2017. In the second half of fiscal 2017/18, Burberry expects to receive cash payments of 130 million pounds for the long-term exclusive global licence and related transfer of the Beauty business, and approximately 50 million pounds for assets transferring totalling approximately 180 million pounds. Burberry will also receive ongoing royalty payments from October 2017.
Christopher Bailey, CEO of Burberry Group plc, stated: 'The combination of the upfront payments and ongoing royalties is financially attractive and is expected to provide an accretive impact to our earnings from fiscal 2018/19.'
Camillo Pane, CEO of Coty Inc., said: 'We look forward to growing further Burberry's luxury beauty products using Coty's world-class expertise in developing and bringing to market beauty brands.'
Burberry currently expects the agreement to be broadly neutral to adjusted profit before tax in the transition year (fiscal 2017/18) and accretive from fiscal 2018/19.
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