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Sainsbury's, Asda offer to close 150 sites; GVC seeks new chair after share sale

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Sainsbury's, Asda offer to close 150 sites; GVC seeks new chair after share sale


* U.K. grocers J Sainsbury PLC and Asda Stores Ltd. offered to close between 125 and 150 stores in order to gain regulatory approval for their merger. The Competition and Markets Authority, or CMA, previously asked the companies "to sell off a significant number of stores and other assets — potentially including one of the Sainsbury's or Asda brands — to recreate the competitive rivalry lost through the merger." In response, Sainsbury's and the Walmart Inc. unit offered a proposed remedy package, which includes divesting up to 150 of their stores and selling number of filling stations, likely about 38, to either grocery buyers or fuel operators. The CMA said it will issue its final decision on the matter by April 30.

* Online betting company GVC Holdings PLC is searching for a new chairperson after CEO Kenny Alexander and current chairman Lee Feldman together sold £20 million worth of GVC shares, the Financial Times reported, citing a company statement. The sale reportedly scared investors, leading to company shares dropping 20% despite the executive saying that he and Feldman "remain fully committed to GVC." A source reportedly told the newspaper that shareholders want either Alexander or Feldman to leave the casino operator, adding that Feldman, in particular, has been the subject of criticism due to "how independent he is."


* U.S. apparel maker PVH Corp. agreed to reacquire the license for its Tommy Hilfiger brand in Hong Kong, Macau, Taiwan, Singapore and Malaysia from investment holding company Dickson Concepts (International) Ltd. Financial terms of the deal were not disclosed, but PVH said the transaction also includes the transfer of certain related leases and retail assets of the Tommy Hilfiger brand in those markets. New York-based PVH, which also owns the Calvin Klein, Van Heusen, Izod, Speedo and Warner's brands of clothing, said the deal is expected to close in the second quarter of 2019.

* Sir Philip Green, owner of Topshop parent Arcadia Group Ltd., has appointed property advisers GCW to talk with landlords, the Press Association reported. The news comes after reports that Green is considering a company voluntary arrangement for Arcadia, which said none of the options it is exploring "involve a significant number of redundancies or store closures." The apparel company is also working with advisers at Deloitte to consider options and to deal with its pension deficit of nearly £1 billion, the report added.

* Shares of LVMH Moët Hennessy Louis Vuitton SE fell nearly 9% to €285.70 in the first few minutes of the French stock market open but recovered most of the lost value by mid-morning on March 25, Reuters reported. Traders reportedly suspect that a "fat-finger" error, like a misclick or wrong keyboard input, caused the shares to slide. LVMH and Euronext, which operates France's CAC 40 Stock Exchange, were not immediately available for comment, the report added.


* Neiman Marcus Group Inc.'s senior vice president and fashion director, Ken Downing, will resign from the department store operator on March 29, Women's Wear Daily reported. Downing, who has been the American company's senior vice president and fashion director since 2006, will join Canadian developer Triple Five Group as its first chief creative officer, according to a separate report by the trade journal. The company, which is still looking for a new chief merchant following the exit of Jim Gold, reportedly has not named a successor for Downing.

* Sports Direct International PLC said its several offers to Debenhams PLC, including its proposed acquisition of Danish business unit Magasin du Nord, is "a valid alternative" to the department store chain's plan to enter "multiple insolvency processes" to address liquidity problems. The sporting goods retailer, which is seeking to appoint its founder Mike Ashley to Debenham's leadership, added that it does not consider its House of Fraser Group Ltd. business as a competitor to the department store chain. "In any event, were Mr. Ashley to become CEO of Debenhams ... He would also be subject to fiduciary duties to Debenhams," the company said.


* Online fashion platform Hangzhou Ruhnn Holding Co. Ltd. priced its U.S. IPO of 10 million American depositary shares between $11.50 and $13.50. The Alibaba Group Holding Ltd.-backed company, which intends to raise $125 million through the offering, applied to list its shares on the Nasdaq Global Market under the symbol RUHN.


* Beauty products companies Natura Cosméticos SA and Avon Products Inc. both issued statements confirming that they have engaged in discussions about a "potential transaction," without giving further details about the nature of their discussions. "[T]he company confirms that it has engaged in discussions with [Avon] concerning a potential transaction involving both companies," Natura said in its statement, while Avon said it held "preliminary discussions" with the Brazilian company. Natura said it was responding to a report in The Wall Street Journal that said the two companies have discussed the possibility of Natura acquiring Avon's North American business and its remaining operations in the publicly traded company.


* Koninklijke Ahold Delhaize NV updated its 2018 financial statements to include the impact of the new IFRS 16 accounting standard. For the year ended Dec. 31, 2018, Ahold Delhaize said underlying EPS decreased to €1.57, versus its previous announcement of €1.60, while underlying operating margin rose 0.3 percentage points to 4.4%. The food retailer maintained its fiscal 2019 forecast that underlying EPS will grow by a high-single-digit percentage and group margin will be steady from a year ago's restated figure.


* S&P Global Ratings downgraded supermarket operator Auchan Holding SA's senior unsecured debt rating to BBB- and its long- and short-term issuer credit ratings to BBB-/A-3 from BBB/A-2 due to its weaker-than-anticipated trading performance in 2018 and high capital expenditures. It also gave the company a negative outlook since it does not expect Auchan to restore positive like-for-like revenues and sound profitability in its key markets soon. Ratings anticipates that the retailer's transformation plan will take longer and be more expensive than initially planned. "We believe new Auchan chairman Edgard Bonte's intention to restore profitability by streamlining the cost structure may prove difficult in a market characterized by a strong competition on prices," the agency said.

* S&P Global Ratings lowered Carrefour SA's long-term ratings and senior unsecured debt to BBB from BBB+, saying it believes the French food retailer will struggle to improve its margins significantly in the next two years. The rating agency said it thinks Carrefour will face heightened competition in all the markets it operates in the coming years, along with challenges brought about by the longer-term nature of its restructuring initiative.


* Turkish appliances retailer Arçelik AS agreed to buy Retail Holdings Bhold BV, which owns 57% of home appliances company Singer Bangladesh, for $75 million. The deal will enable Arçelik to expand its presence in the Asia-Pacific region as part of its Silk Road strategy. The transaction is expected to close in April and is subject to certain post-closing adjustments.

* Creditors of Paperchase Products Ltd. approved the U.K. stationery chain's proposal for a company voluntary arrangement, or CVA, following its consultations with stakeholders. Under the CVA, Paperchase will seek turnover-linked rents at 70 of its stores, with guaranteed minimum base rents between 35% and 80%. It will also slash rent by 50% for three months at 28 other outlets, which will see either a rent-free period or a closure.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng Index was down 2.03% to 28,523.35. The Nikkei 225 retreated 3.01% to 20,977.11.

In Europe, around midday, the FTSE 100 was down 0.26% to 7,188.88, and the Euronext 100 fell 0.29% to 1,023.84.

On the macro front

The Federal Reserve Bank of Chicago's National Activity Index and the Dallas Fed's Manufacturing Survey are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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