Sainsbury’s hopes of offloading its retail business Argos to one of China’s biggest retailers have collapsed as talks ended on Sunday.
The supermarket giant confirmed it was no longer in discussions with JD.com to sell Argos, the general merchandise arm it bought for more than £1bn less than a decade ago.
On Saturday it had announced talks with JD.com for a sale that it said would speed up the transformation of Argos, whose business has gone increasingly online and within larger Sainsbury’s branches.
But 24 hours later, Sainsbury’s said the deal was off. It said: “JD.com has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments which are not in the best interests of Sainsbury’s shareholders, colleagues and broader stakeholders. Accordingly, Sainsbury’s confirms that it has now terminated discussions with JD.com.”
JD.com, which is unrelated to JD Sports, is one of China’s biggest retailers and also provides its supply chain-based technology and services across other sectors. Last year, JD.com walked away from a deal to buy the UK white goods and electronics retailer Curry’s.
Argos is the UK’s second largest general merchandise retailer, behind Tesco, with the third most visited retail website in the UK, according to Sainsbury’s. It retains almost 200 standalone stores – with kiosks where customers used to peruse its famous catalogue – and more than 1,100 collection points, mostly in Sainsbury’s stores.
Before the collapse, Sainsbury’s had talked up the potential deal as accelerating its turnaround of Argos, saying: “JD.com would bring world-class retail, technology and logistics expertise and invest to drive Argos’s growth and further transform the customer experience.”
A sale would almost certainly have commanded a far lower figure than the £1.1bn Sainsbury’s paid in 2016 for Home Retail, the then owner of Argos. Sainsbury’s latest accounts valued the chain at £344m, and the group said growth at the main supermarket business was weighed down by falling Argos profits.
Some retail analysts have questioned the supermarket’s transplanting of the Argos operation into its stores. Hundreds of standalone Argos stores were closed as the business restructured and moved more to online shopping.
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In 2023, Sainsbury’s closed down two Argos distribution centres and the business’s head office in Milton Keynes in a further attempt to cut costs.