Could Starbucks be considering a partial sale of its China business?
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Diverging Reports Breakdown
Could Starbucks be considering a partial sale of its China business?
Starbucks is not considering a full sale of its China division, despite rumors that the coffee chain would offload its second-largest global market. 20 potential buyers have been in talks with Starbucks China, including private equity firm Hillhouse Capital. Starbucks CEO Brian Niccol recently denied that the company would be offloading its China business, though has called competition in the market “extreme,” likely referring to Luckin Coffee’s dominance.
Chinese financial magazine Caixin reported that 20 potential buyers have been in talks with Starbucks China, including private equity firm Hillhouse Capital, which participated in a reverse management roadshow with the coffee chain’s Chinese division. This format traditionally allows potential investors to visit a company’s facilities and see them firsthand.
“I can confirm Starbucks is not currently considering a full sale of its China operations,” a Starbucks spokesperson told Reuters.
A Starbucks China spokesperson elaborated further to Bloomberg, stating, “We see significant long-term potential in the market and are evaluating the best ways to capture the future growth opportunities.”
In November 2023, Luckin Coffee overtook Starbucks as the largest coffee chain in China, prompting rumors that the company would be selling off its China business. Starbucks CEO Brian Niccol recently denied that the company would be offloading its China business, though has called competition in the market “extreme,” likely referring to Luckin Coffee’s dominance in the region.
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“As we see signs of progress, I want to be clear that we remain committed to China for the long term,” Niccol said in the company’s most recent earnings call in April. “We see great potential for our business there in the years ahead and remain open to how we achieve that growth.”
This marks the first time Starbucks has used the phrase “full sale” when discussing its options for the region, suggesting the company might be open to a partial sale given the pressures from growing competition from Luckin Coffee and others.
Since last year, Starbucks China has shuffled its top leadership team, including the promotion of Molly Liu to sole CEO of the division, and the appointment of Starbucks China’s first chief growth officer last December.
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