Swiss-based Dufry buying Folli duty-free ops

ATHENS, Oct 10 (Reuters) - Greek retailer Folli Follie

has agreed to sell a controlling stake in its localduty-free operations to Dufry , a Switzerland-basedglobal travel retailer.

The Swiss company will pay 200.5 million euros ($258.6million) for a 51 percent stake in Folli's duty-free operations,which includes a network of 90 shops at 45 locations across thecountry, the retailer said in a statement.

Dufry will have an option to buy the remaining 49 percent infour years' time at a fair market value, it added.

Folli Follie said in a bourse filing last month that talksbetween the two companies were at an advanced stage. Thetransaction is a rare deal to emerge in recession-hit Greece.

"I believe (the transaction) ... represents another big stepforward in our strategy to consolidate the fragmented travelretail industry," Dufry Chief Executive Julian Diaz said.

"Greece is expected to remain an attractive touristdestination, irrespective of the current situation of theeconomy."

The European debt crisis has hurt tourism less than othersectors of the Greek economy. Tourism revenue is expected todecline just 5 percent this year, with more than 16 millionvisitors arriving, just slightly below a record 16.5 millionlast year.

Folli, one of Greece's most successful companies, sellsjewelry and other accessories at about 800 stores in Europe,Asia and the United States. Its operating profit reached 84million euros last year, on sales of 290 million.

The company took over Hellenic Duty Free Shops in 2010.Chinese private conglomerate Fosun owns 13.4 percentof Folli.($1 = 0.7754 euros)

(Reporting by Karolina Tagaris; Editing by David Holmes)

((karolina.tagaris@thomsonreuters.com)(+30 210 3376438)(Reuters Messaging:karolina.tagaris.thomsonreuters.com@reuters.com))