UK supermarket chain Sainsbury’s has terminated negotiations to sell Argos to Chinese e-commerce giant JD.com.

Argos is a long-standing UK general merchandise chain, best known for its catalogue-and-collect model and now one of the country’s busiest retail websites.

Argos sells everything from electronics and toys to furniture and appliances, operating both standalone outlets and concessions inside Sainsbury’s stores.

The deal fell apart after JD proposed materially revised terms that the board judged were not in the best interests of shareholders, employees, or customers.

The fate of Argos continues to hang in the balance

Sainsbury’s acquired Argos in 2016 for approximately £1.1 billion ($2.25 billion). But the business has subsequently struggled with inflation, shifting consumer habits, and fierce competition.

Analysts now estimate Argos is worth about £344 million ($700 million), a fraction of its 2016 purchase price.

Despite those headwinds, Argos remains a significant retail presence, operating more than 1,100 collection points across the UK and running one of the country’s busiest retail websites.

Nontheless, Sainsbury’s has been under pressure to sharpen its focus on food retailing under chief executive Simon Roberts.

The breakdown of talks highlights the difficulty of finding a buyer willing to take on a once-iconic retailer in today’s market.

For JD.com, the proposed acquisition would have offered a foothold in Britain’s general merchandise sector.

With discussions now abandoned, Sainsbury’s will need to consider other ways to restructure or reposition Argos.