Starbucks announced on Monday that it will sell up to 60% of its retail business in China to Boyu Capital, a private equity firm, in a deal valued at $4 billion. The transaction will form a joint venture operating nearly 8,000 stores across China, with Starbucks retaining its brand ownership and licensing rights to the new entity.
The company estimated the total value of its China operations to exceed $13 billion, factoring in the sale proceeds, its remaining 40% stake, and projected licensing income over the next decade. CEO Brian Niccol said the partnership would combine Starbucks’ global coffee expertise and brand strength with Boyu’s deep local market knowledge. The joint venture is expected to close in early 2026.
China has long been a key growth market for Starbucks, which opened its first store there in 1999. As China’s middle class expanded and embraced Western lifestyle brands, the coffee chain grew rapidly, making China its second-largest market, representing around 8% of total revenue. By June, Starbucks operated 7,828 Chinese stores, compared to 17,230 in the U.S.
However, Starbucks now faces intensifying competition from domestic rivals such as Luckin Coffee, ChaGee, and HeyTea, which attract younger consumers with creative drinks and aggressive promotions. Starbucks’ decision to avoid price wars has led to slower same-store sales and a smaller market share in recent years.
Niccol, who has been focused on turning around Starbucks’ U.S. operations, is also tasked with reviving growth in China. Despite a 5.5% rise in global revenue last quarter to $9.6 billion, net income fell 85% to $133 million amid store closures and layoffs. Niccol previously told investors that the company needed to redefine its growth strategy in China and that working with a strategic partner like Boyu could be key to unlocking that next phase.
Source: The New York Times
