Starbucks might sell stake in its business in China
What's the story
Starbucks Corporation is considering a possible stake sale in its China business, as per Bloomberg. The US-based coffee giant has approached private equity firms and technology companies to discuss different options for its business in the country. The move could potentially value the firm's assets in the region at several billion dollars.
Investor outreach
Firm seeks investor feedback on China operations
Starbucks has sent letters via a financial advisor to a number of potential investors this week. The letters are aimed at collecting insights on the company's China business and how it can be grown. Interested bidders are likely to submit initial feedback in the coming weeks, but there's no assurance that Starbucks will go ahead with any deal.
Market challenges
Competition from local brands
Starbucks has over 7,750 stores in China and earned around $740 million net revenue in the country in Q1 2025. However, it also faces tough competition from local coffee brands such as Luckin Coffee and Cotti Coffee. In the same period, Luckin reported a net revenue of $1.2 billion, underscoring the competitive landscape Starbucks is up against in its second-largest market.
Future plans
Starbucks remains committed to long-term growth in China
Starbucks has not commented beyond what was publicly shared during an earnings call in late April. CEO Brian Niccol expressed optimism about the firm's progress in China, following changes to product offerings and prices. He said, "We remain committed to China for the long term... We see great potential for our business there in the years ahead and remain open to how we achieve that growth."