Starbucks explores selling stake in Chinese business amid strategic growth plans

Starbucks is considering selling a stake in its Chinese operations, as it is exploring strategic partnerships to drive growth, the coffee chain said.

A global spokesperson for Starbucks said in a statement: "We are wholeheartedly committed to our business in China, our partners (employees) and the long-term development of the Chinese market."

The company added: "As mentioned during the Q4 earnings call, we are taking time to gain a deeper understanding of our business operations in China and the competitive market environment. We are working hard to identify the best growth pathways, including exploring strategic partnerships."

According to a Bloomberg News report on Thursday, Starbucks is evaluating various options for its Chinese business, including the potential sale of a stake. Such a move could attract interest from Chinese conglomerates or local companies with experience in the industry.

Similar strategies have been adopted by other global brands, including McDonald's Corp and Yum Brands Inc, which sold stakes in their Chinese businesses to private equity firms to increase market share and align with local strategies.

In the fourth quarter of fiscal 2024, Starbucks reported $783.7 million in revenue from China, a 6 percent increase from the previous quarter despite a 7 percent year-on-year decline. The drop was attributed to intensified competition and a challenging macroeconomic environment affecting consumer spending.

For the full fiscal year, Starbucks China added 790 new stores, reflecting a 12 percent year-on-year growth in its store number.