Overview

• Starbucks has contacted private equity firms and technology companies through a financial adviser to explore selling a minority stake in its China business.
• The potential stake sale could value the China operations at several billion dollars, though Starbucks retains the option not to proceed with a deal.
• The move follows four consecutive quarters of declining sales in China, with revenue stabilizing at $740 million in the most recent quarter, significantly trailing rival Luckin Coffee’s $1.2 billion.
• CEO Brian Niccol has reiterated Starbucks’ long-term commitment to China despite macroeconomic headwinds and intensified competition from local brands like Luckin and Cotti Coffee.
• The strategy mirrors similar approaches by McDonald’s and Yum! Brands, which sold stakes in their China businesses to enhance local market adaptation.