Sainsbury's has confirmed it is no longer in discussions to sell its Argos retail business to Chinese retailer JD.com, after talks collapsed on Sunday. The supermarket giant had announced exclusive negotiations on Saturday, but JD.com subsequently demanded materially revised terms that Sainsbury's deemed not in the best interests of its shareholders, colleagues, and broader stakeholders.
The potential sale would have involved the general merchandise arm that Sainsbury's acquired for £1.1 billion in 2016. Sainsbury's latest accounts valued Argos at £344 million, reflecting a significant decline in value. The supermarket had hoped that JD.com's expertise in retail, technology, and logistics would accelerate Argos's transformation, as the business increasingly shifts online and integrates with Sainsbury's stores.
JD.com, unrelated to JD Sports, is one of China's largest retailers and also provides supply chain technology and services. Last year, it walked away from a deal to acquire UK electronics retailer Currys. Argos remains the UK's second largest general merchandise retailer, behind Tesco, with nearly 200 standalone stores and over 1,100 collection points, mostly within Sainsbury's branches.
The collapse of the talks marks another setback for Sainsbury's efforts to offload Argos, whose profits have been declining and weighing on the group's overall growth. In 2023, Sainsbury's closed two Argos distribution centres and its head office in Milton Keynes as part of cost-cutting measures. Analysts have questioned the integration of Argos into Sainsbury's stores, with hundreds of standalone outlets closed as the business restructured for online shopping.
