Burberry is to take the reins of the Burberry Bag Company, which it bought in 2008.
The new company will have about 1,200 employees and a portfolio of brands including the BurieBags brand and the Burpies brand.
Burberry’s shares rose nearly 8 per cent in premarket trading.
It will be led by chief executive Paul Balfour.
It’s not known what Burberry plans to do with the business.
“Burberry Bag is committed to our team, our products and our customers,” Burberry Group chief executive David Dolan said in a statement.
The deal is expected to close in the second half of 2019.
The company will retain ownership of its manufacturing and distribution businesses, with the exception of a few brands, including Burberry shoes.
The other brands will be split between Burberry and its parent company, WPP Holdings PLC, according to a statement from Burberry.
The Burberry group owns about 15 per cent of the company.
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