San Francisco Frontiers - Starbucks cedes China control to Boyu Capital

Under the agreement, Boyu will hold up to 60 percent of a new joint venture operating 8,000 Starbucks stores across China, while the Seattle-based company retains a 40 percent stake and continues to own the brand and intellectual property.

The partnership marks a strategic shift for Starbucks after more than 26 years in China, combining the global coffee chain's brand recognition with Boyu's local market expertise to expand into smaller cities and new regions.

China represents Starbucks's second biggest market globally, though the company has faced increasing competition from local coffee chains like Luckin coffee that has won over customers with lower prices.

Starbucks reported last week that its latest quarterly same-store sales in China increased by two percent, fueled by an increase in traffic, but added that average spending per ticket had dropped.

The company said it expects the total value of its China retail business to exceed $13 billion, including proceeds from the sale, its retained interest, and future licensing fees over the next decade.

"Boyu's deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions," said Starbucks CEO Brian Niccol.

The companies said they aim to grow the store count to as many as 20,000 locations over time, with the business continuing to be headquartered in Shanghai.

The deal is expected to close in the second quarter of fiscal year 2026, pending regulatory approvals.

Y.Harris--SFF