Burberry will hand over its fragrances and cosmetics arm to American beauty conglomerate Coty in a deal worth approximately £180 million.
Burberry said it would retain creative control of the division while beauty products maker Coty would bring its global distribution network to the table.
Coty, whose beauty brands include Calvin Klein, Chloe and Rimmel, will pay £130 million for licence lasting at least ten years and buy around £50 million worth of stock from Burberry once the deal is completed.
Burberry said it would benefit “from Coty’s deep beauty industry expertise and first-class global distribution”.
In January, Burberry reported like-for-like sales growth of 40 per cent in the three months to December 2016, its most recent results, across the group like-for-like sales rose by 3 per cent.
The exclusive licensing agreement will take effect from October 2017, subject to regulatory approvals.