Sainsbury’s ill-starred ownership of the Argos retail business looks likely to end as the supermarket negotiates a sale to the Chinese retailer JD.com.
No agreement has yet been reached but Sainsbury’s confirmed it was in discussions to hive off Argos, the general merchandise arm it bought for more than £1bn less than a decade ago.
Sainsbury’s said a sale to JD.com would speed up the transformation of Argos, whose business has gone increasingly online and within larger Sainsbury’s branches.
JD.com (unrelated to JD Sports) is one of China’s biggest retailers and also provides its supply chain-based technology and services across other sectors.
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 stand-alone stores – with kiosks where customers used to peruse its famous catalogue – and more than 1,100 collection points, mostly in Sainsbury’s stores.
In a statement confirming the discussions, Sainsbury’s said it was “committed to delivering the strongest and most successful future for Argos customers and colleagues”.
It claimed its transformation strategy was delivering “solid progress” but a sale to JD.com would accelerate the turnaround.
The supermarket added: “JD.com would bring world-class retail, technology and logistics expertise and invest to drive Argos’s growth and further transform the customer experience. The terms of any possible transaction would include commitments from JD.com in relation to Argos for the benefit of customers, colleagues and partners.”
It added the caveat that there was “no certainty at this stage that any transaction will proceed”. Last year, JD.com walked away from a deal to buy the UK white goods and electronics retailer Curry’s.
A sale would almost certainly command 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.
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Some retail analysts have questioned the supermarket’s transplanting of the Argos operation into mini stores-in-stores. Hundreds of stand-alone Argos stores were closed as the business restructured and moved more to online shopping.
Although Sainsbury’s has indicated any deal with JD.com would have staff in mind, its own takeover eventually led to hundreds of Argos postsbeing axed.
In 2023, Sainsbury’s also closed down two Argos distribution centres and the business’s head office in Milton Keynes, in a further attempt to cut costs.
