Decathlon to start talks to sell stake in China business

Decathlon SA has started a process to sell about 30% of its China business, according to people familiar with the situation.

The French sporting goods retailer is working with an adviser and attracted initial interest from potential investors, the people said, asking not to be identified because the talks aren’t public. However, a sticking point is the size of the stake, as the parties may want more than a minority, the people said. 

If a transaction materializes, it could value the China business at $1 billion or more, the people said. 

Decathlon may decide against a sale or consider other options to help it expand in China, the people added. 

Decathlon remains committed to its long-term growth in China, its representative said in a response to Bloomberg News query, declining to comment on the potential stake sale.

Bloomberg News reported previously that Decathlon was exploring a minority stake sale for its business in China, where it has operated for more than 30 years and has over 200 outlets. Last year, the unit’s revenue totaled about 10 billion yuan ($1.4 billion), the people said. 

Decathlon is part of a larger group of brands controlled by France’s billionaire Mulliez family, including supermarket chain Auchan and DIY firm Leroy Merlin.

China’s economy grew a better-than-expected 5.4% in the first quarter, with consumption helping to provide momentum thanks to government subsidies. 

About 94% of Decathlon’s products sold in China are produced locally, according to a China Daily report in May, which also said the company planned to open 20 to 30 stores annually in the country.