Bloomberg: company has begun talks with investment banks; deal could be worth 3.8 trillion to 4.75 trillion won, with IPO also on the table

A Starbucks store at the Shibuya crossing in Tokyo. Tourists and locals take photos outside the store. [AFP]
A Starbucks store at the Shibuya crossing in Tokyo. Tourists and locals take photos outside the store. [AFP]

Starbucks is considering selling its Japan business, according to a new report.

Bloomberg reported Tuesday that the American coffee chain has begun consulting with investment banks on a potential sale of its Japan operations, though no final decision has been made.

The deal could be valued at between 400 billion and 500 billion yen (3.8 trillion to 4.75 trillion won, or about $3.14 billion), Bloomberg said, adding that a separate initial public offering of the Japan unit is also under consideration.

Starbucks did not respond to a request for comment.

Starbucks entered Japan in 1995 through a joint venture with domestic retail company Sazaby League. In 2014, it bought out Sazaby's stake and converted the operation into a wholly owned subsidiary. The company now operates more than 2,100 stores in Japan.

The chain has been struggling in the United States, which accounts for roughly 70 percent of its total sales, prompting CEO Brian Niccol to lead a round of store closures and restructuring.

Starbucks has also faced headwinds in China, its largest market, where it has lost ground to low-cost local rivals such as Luckin Coffee. Last November, the company announced it would sell a 60 percent stake in its China business to local private equity fund Baowei Capital, under a structure in which Baowei Capital holds 60 percent of the joint venture while Starbucks retains a 40 percent stake along with the brand's intellectual property rights.


jshan@heraldcorp.com