Starbucks Corp (NASDAQ:SBUX, ETR:SRB) is reportedly considering selling its stake in its China business as it struggles amid rising competition from value-focused domestic brands.
The Seattle-based coffee chain has engaged advisors to look into options for growing its business in China which could include partnering with a local master franchise or private equity firm, according to a Bloomberg report citing sources with knowledge of the matter.
The stake sale could also attract interest from Chinese conglomerate or other local companies in the industry, the sources told the publication.
Starbucks CEO Brian Niccol back in October confirmed the company was exploring “strategic partnerships” in China to support its long-term growth in the market.
Its China same-store sales fell 14% year-over-year for the quarter ending September 29, 2024, as it has faced increased competition from domestic chains Luckin Coffee and Cotti Coffee.
China is Starbucks’ second-largest market after the US, with more than 7,500 stores representing nearly one-fifth of its global store footprint.
Shares of Starbucks traded 1.8% higher at about $100 on Thursday morning, having gained about 6.7% so far in 2024.