Sainsbury’s has said it has pulled back from talks about selling Argos to a firm seen as China’s version of Amazon.
After Britain’s second-largest supermarket confirmed it was in talks with Jingdong about a sale yesterday, it shot down the idea shortly afterwards.
They said this was because the company, which trades as JD.com, had ‘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.’
A statement on their website said: ‘Accordingly, Sainsbury’s confirms that it has now terminated discussions with JD.com.’
Sainsbury’s acquired Argos for £1.4 billion in 2016 in a bid to compete with online retail giant Amazon, but the business has not been as profitable as hoped.
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Following the takeover, dozens of standalone Argos stores were closed in favour of outlets within Sainsbury’s superstores.
Argos currently operates 1,100 collection stores across the country and is the third-most visited retail site in the UK.
The Sainsbury’s statement continued: ‘Argos is the UK’s second largest general merchandise retailer, with the third most visited retail website in the UK and over 1,100 collection points.
‘Sainsbury’s is committed to delivering the strongest and most successful future for Argos customers and colleagues and our ‘More Argos, more often’ transformation strategy is delivering good progress.’
Before revealing the talks had been scrapped, Sainsbury’s had said the deal would ‘accelerate Argos’ transformation’ and ‘further transform the customer experience’.
But it clarified that ‘no agreement has been reached and there is no certainty at this stage that any transaction will proceed’.
Argos already has franchised outlets in China, while Jingdong has been growing its footprint in the UK, having acquired a 23,000 sqm warehouse in Rugby this summer.
The e-commerce website sells food, homeware and clothes to more than 600 million customers worldwide across more than 200 countries.
It currently operates 11 sites in the UK.
The firm was established by entrepreneur Liu Qiangdong in 1998 as a store selling magneto optical drives, before going online in 2004.
Liu is now one of China’s wealthiest men, with an estimated fortune of $5 billion (£3.7 billion).
In 2014, it became the largest Chinese company to be listed on the US Nasdaq and last year posted a revenue of nearly $160 billion (£118 billion).
Argos was founded by Richard Tompkins in 1978, branded after its Greek city namesake.
The chain became synonymous with its signature catalogues, which were taken out of print during the Covid pandemic.
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