australia retail
A shopper carries shopping bags from a fashion store in Sydney's central retail district, Australia, May 5, 2016. Reuters/Jason Reed

Furla has bought back from Luxury Retail Group (LRG) its Australian distribution network. The premium handbag-maker company said that the acquisition has reaffirmed the vision of the brand to further strengthen its presence in Australia and New Zealand. LRG claimed that the buy back decision was a vote of confidence in the country's expanding luxury sector.

The handbag-maker company has sold its Italian accessories through a network of 15 stores in the country. In less than four years, the sales growth increased to 5 percent representing the annual and global revenue of the brand. The company's stores in Australia and New Zealand were expected to increase by 20 percent in 2017. The expected revenue was $40 million which was less than 10 years after the brand's withdrawal from the region.

According to sources close to the deal, Furla's decision to reacquire the business earlier than planned was due to the success of businesses in Australia. Research group IBISWorld said that there was a growth of more than eight percent a year in luxury retail sales in Australia. The group said that the sales growth majorly came from the clothing and footwear industry.

Five more stores of Furla were expected to open in Australia and New Zealand and Westfield Sydney boutique was also expected to expand. In Oceania, the brand was expected to complete 20 stores by the end of 2017.

CEO of Furla Group Alberto Camerlengo said that the Australian market was very important for Furla. He said that the country's market was also crucial in the company's expansion plan. He added that LRG has been the best key partner of the company as the luxury group has perfectly embodied the vision, values and DNA of Furla. LRG Managing Director Nelson Mair said that the vertical integration of Furla Australia would better equip the business for the next phase of its growth. Mair said that after the company achieved more than 95 percent of sales growth in 2016, the timing for Furla to reacquire distribution makes sense. He said that he was proud of his team and their achievement for the company's growth in a short period of time. The LRG managing director has expressed his gratitude to Furla for trusting the company.

An annual revenue of $100 million was expected from LRG as the luxury group aimed to be the most successful in retail operation. The luxury group operates Sneakerboy and Australia's first Balenciaga store.

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