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Albertsons, Rite Aid to merge; Walmart Q4'18 misses analysts' expectations

TOP NEWS

* U.S. grocery chain Albertsons and drug retailer Rite Aid Corp. agreed to merge in a deal to provide customers with convenient access to a range of food, health and wellness offerings. Under the terms of the deal, Rite Aid will own 28% to 29.6% of the combined company and Albertsons' shareholders will own 70.4% to 72%. John Standley, Rite Aid's current chairman and CEO, will serve as CEO of the new entity, while Albertsons Chairman Bob Miller will become chairman. The merged companies are expected to generate 2018 revenue of $83 billion from a portfolio of about 4,900 stores, 4,350 pharmacies and 320 clinics.

* Walmart Inc. missed analyst expectations in its fiscal fourth quarter, although the retail giant's revenue rose year over year. The Arkansas-based company posted adjusted EPS of $1.33 for the fiscal fourth quarter ended Jan. 31, below the mean consensus for normalized EPS compiled by S&P Capital IQ of $1.37. The company reported total revenue of $136.27 billion, an increase of 4.1% from the year-ago period, driven by e-commerce sales, which grew 23% during the quarter.

TEXTILES, APPAREL AND LUXURY GOODS

* The board of British retailer Arcadia Group, which owns fashion labels Top Shop and Miss Selfridge, refuted rumors that it is in talks to sell the company to Shandong Jining Ruyi Woolen Textile Co. Ltd., The Guardian reported. According to the newspaper, the London-based company denied meeting or contacting the Chinese textiles producer, adding that reports saying Arcadia Chairman Philip Green has been "seeking a buyer for some time" were "totally false."

* French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton SE named Serge Brunschwig as the new chairman and CEO of its Italian fashion brand Fendi, replacing Pietro Beccari, who was appointed chairman and CEO of Christian Dior SE, Reuters reported.

* Chanel SA acquired a minority stake in British online retailer Farfetch as part of a partnership to develop customer service innovations connecting the French fashion house to its clients, Reuters reported. Chanel fashion President Bruno Pavlovsky said the Paris-based company will not sell its products through Farfetch's platform but will work with the e-commerce company to expand Chanel's digital reach. Terms of the transaction were not disclosed.

E-COMMERCE

* Walmart Inc.'s ongoing investment negotiations with Indian online marketplace Flipkart India Pvt. Ltd. include the launch of a proposed chain of retail stores in India, The Economic Times of India reported, citing an investment banker familiar with the matter. U.S. retail giant Walmart reportedly is in talks to buy more than a 30% stake in the Indian company but is expected to acquire only a 20% stake due to objections from Flipkart's newest investor, SoftBank Group Corp.

HOUSEHOLD AND PERSONAL PRODUCTS

* Health and hygiene company Reckitt Benckiser Group PLC said its revenue returned to growth in the fourth quarter ended Dec. 31, 2017, increasing 2% year over year on a like-for-like basis at constant exchange rates to £3.29 billion. In a conference call with analysts, CFO Adrian Hennah said big players such as Reckitt Benckiser were under "huge pressure" due to rising commodity prices and from structural changes in the retail industry as consumers make more purchases online.

FOOD AND STAPLES RETAILING

* KFC, a division of fast-food restaurant operator Yum! Brands Inc., said distribution problems meant that the majority of its U.K. and Ireland restaurants had run out of chicken, forcing most to close temporarily, offer limited menus or reduce operating hours. It did not provide any indication of how long the disruption would last.

* Houston-based Sysco Corp. acquired Louisiana-based Doerle Food Services for an undisclosed amount with plans to retain the executive management team of the food service distributor.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* The Home Depot Inc. reported that earnings per share for the fourth quarter ended Jan. 28 increased 5.6% year over year to $1.52, while sales grew 7.5% to $23.88 billion compared with the same period a year earlier. The home improvement retailer said that for the fiscal year ended Jan. 28, EPS aggregated $7.29, up 13% compared to the prior year, and net earnings totaled $8.63 billion, up 8.5% year over year. For fiscal 2018, Home Depot expects EPS of $9.31 and sales growth of roughly 6.5%, with comparable-store sales growth of 5.0%.

* The Enterprise Chamber of the Amsterdam Court of Appeal has ordered Steinhoff International Holdings NV to amend its 2016 accounts to recognize the interest of a joint venture partner, the troubled South African retailer said Feb. 20. In a long-awaited decision, the Dutch court ruled that the firm, which operates the Sleepy's brand in the U.S., Poundland in the U.K. and Conforama in continental Europe, needed to reverse its decision to consolidate 100% of discount value chain Poco.

* The U.K. Gambling Commission will impose a fine of at least £6.2 million on William Hill Ltd. after the regulator's investigation revealed that the company's management failed to protect consumers and prevent money laundering between November 2014 and August 2016. In a statement posted on William Hill's website, CEO Philip Bowcock said that the casino company "fully co-operated" with the commission throughout the probe, adding that it will continue to work with the agency and other operators to improve operations.

* San Francisco-based activist hedge fund ValueAct Capital Management LP disclosed a 5.4% stake in Merlin Entertainments Group, making it the third-largest holder in the U.K. theme park operator at 54.7 million shares held, according to a London Stock Exchange filing. Kirkbi Invest A/S remains Merlin's top investor, holding 29.67% of the company's shares, followed by The Wellcome Trust Ltd, which owns 5.39%.

* U.K. private equity firm Rutland Partners is in discussions with potential buyers, including apparel company Edinburgh Woollen Mill, as it looks to sell Maplin Electronics ahead of bankruptcy proceedings, Sky News reported, citing a spokesman for the Rotherham-based company. Maplin, which is at risk of laying off approximately 2,500 employees if it falls into administration, said it expects to announce "a solvent sale of the business within days."