Starbucks Reportedly Considering Restructuring Its China Business, Including Potential Equity Sale

According to知情 sources cited by Bloomberg, the US-based multinational coffee chain Starbucks has reached out to private equity firms, technology companies, and others to consider various options for its China business, including a potential equity sale. This week, Starbucks sent letters to several potential investors through its financial advisors to solicit their opinions on its China operations and how to develop the business. The sources said that the transaction could value the assets in the billions of dollars.

Earlier reports from Bloomberg indicated that Starbucks is evaluating its operations in China – the company's second-largest market. Starbucks has warned of macroeconomic and competitive pressures in China, with companies like Luckin Coffee and Cotti Coffee becoming major domestic players in the coffee industry.

As of the end of March, Starbucks had more than 7,750 stores in China. In the quarter ended in March, Starbucks' net revenue in China was approximately $740 million. During the same period, Luckin Coffee's net income was $1.2 billion. The sources said that potential bidders are expected to submit preliminary feedback within the next few weeks. They also mentioned that Starbucks may decide not to proceed with the deal.

A representative of Starbucks said there was no further comment beyond what had been publicly shared, citing a statement made by CEO Nicole during the earnings call in late April – at that time, Nicole mentioned that there were signs of progress in China following changes in product offerings and pricing.

"We remain committed to the long-term future of the China market," Nicole said at the time. "We see significant potential in our China business over the next few years and are open to discussing ways to achieve growth." Nicole previously stated last October that Starbucks is exploring partnerships to promote its long-term development but provided no further details.

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