Acquisition is expected to contribute approximately $200 million in retail sales for 2017.

Michael Kors has acquired Michael Kors (HK) Limited, the exclusive licensee of the company in China, for $500 million.

The China licensee business generated $197 million in total revenue for the year, which ended March 31, and had a network of 91 retail stores and six travel retail locations across China, Hong Kong, Macau and Taiwan.

For 2017, the business is expected to contribute roughly $200 million in retail sales and is expected to be neutral to earnings per share. However, the acquisition is expected to be accretive to earnings per share in fiscal 2018 and thereafter.

“We are very excited about the acquisition of our Greater China licensee,” says John D. Idol, chairman and chief executive officer, Michael Kors. “As you know, we have worked diligently over the past several years, with our licensed partner in this region, to build the infrastructure, establish the brand and grow acceptance of Michael Kors in the Chinese market. We believe that our brand is gaining strong momentum in Great China, making it the ideal time for us to integrate this territory into our business and capitalize on the enormous growth potential in this region.”