British supermarket group J Sainsbury is in discussions with Chinese e-commerce giant JD.com about a potential sale of its Argos general merchandise business.
The talks, confirmed by Sainsbury’s on Saturday, come almost a decade after the retailer acquired Argos for £1.4 billion in 2016.
While no agreement has been reached, a deal would mark a major shift in Sainsbury’s strategy and give JD.com a significant foothold in the UK retail market.
Discussions underway but no certainty of deal
In a statement, Sainsbury’s said that talks with JD.com are ongoing but stressed that “there is no certainty at this stage that any transaction will proceed.”
The group added that any potential agreement would include commitments from JD.com regarding Argos customers, employees, and partners.
Sainsbury’s highlighted that a sale could “accelerate Argos’ transformation,” with JD.com expected to bring “world-class retail, technology and logistics expertise” to the business.
Such expertise could help drive Argos’ growth and improve customer experience.
Reports suggest the two sides have been in discussions for months, with Sainsbury’s setting up a dedicated team to explore the deal.
The supermarket has also restructured parts of its management to carve out Argos operations, potentially easing a transfer of ownership.
Recent moves include Argos’s transformation team reporting directly to its managing director, Graham Biggart.
Argos performance and valuation
Argos is the UK’s second-largest general merchandise retailer and operates one of the country’s most visited retail websites.
It has over 1,100 collection points, many within Sainsbury’s stores.
Despite these strengths, the chain has struggled in recent years amid declining consumer confidence and reduced spending on household goods.
When Sainsbury’s acquired Argos in 2016, the supermarket argued that the deal would deliver cost savings, expand its product range, and improve delivery times.
However, Argos’s performance has faltered, with its most recent valuation standing at £344 million — a steep drop from the £1.4 billion paid almost a decade ago.
Sainsbury’s chief executive Simon Roberts recently acknowledged the impact of cautious consumer spending and “tough, competitive market conditions” on Argos.
The company has increasingly shifted its focus toward its food business, where it sees greater growth opportunities.
JD.com’s strategic interest in the UK
For JD.com, one of China’s largest retailers with annual revenues close to $160 billion, the acquisition of Argos would represent a major step into the UK market.
The Beijing-based group previously attempted to buy electrical retailer Currys but abandoned the bid after facing competition from private equity firm Elliott Advisors.
The company has been building its European presence, opening a large automated warehouse in Poland and recruiting senior executives from leading British retailers, including Tesco, Ocado, and Amazon.
It has also trialled its own UK-focused online brand, Joybuy, which recently updated its website with a design similar to Argos.
If successful, the acquisition would end nearly 10 years of Sainsbury’s ownership of Argos and position JD.com as a new competitor on the British high street.
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