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Amazon gets HQ2 incentive package; Prada shares fall 12% on FY'18 earnings miss


Amazon gets HQ2 incentive package; Prada shares fall 12% on FY'18 earnings miss

TOP NEWS

* Amazon.com Inc. has cleared a hurdle for its planned second headquarters after local officials in Arlington, Va., approved a proposed financial incentive package of approximately $23 million for the e-commerce giant. On March 16, the Arlington County Board approved a proposed annual pay-for-performance grant of approximately $23 million for Amazon, conditional upon the company meeting targets of occupying 6 million square feet of office space over the next 15 years. The incentive will be taken from a portion of Arlington's revenue collected from taxes on hotel rooms or other paid lodging. The county has also committed to investing a projected $28 million for public infrastructure projects in Pentagon City, Potomac Yard and Crystal City.

* Prada SpA shares fell by as much as 12% on March 18 on the Hong Kong Stock Exchange after the company posted fiscal 2018 earnings that were below expectations. The retailer, which lost $864 million in value following the announcement, attributed the decline to "Chinese tourists pulling back spending in Hong Kong and Macau because of the weakness in the yuan," according to a Bloomberg News report. For the year ended Dec. 31, 2018, the luxury goods company said net income fell 17.5% year over year to €205 million, missing the S&P Global Market Intelligence consensus GAAP net income estimate of €267.9 million. Revenue increased 2.8% year over year, or 6 at constant exchange rates, to €3.14 billion. Prada's board proposed to distribute an annual dividend of 6 euro cents per share, versus 7.5 cents in the previous year.

TEXTILES, APPAREL AND LUXURY GOODS

* LVMH Moët Hennessy Louis Vuitton SE-owned Louis Vuitton is pulling Michael Jackson-themed items from its 2019 summer menswear collection following the release of a documentary featuring allegations of child abuse against the late pop star, Reuters reported, citing a company spokeswoman. The new collection is expected to launch in stores in June after being featured in January at the Paris Fashion Week, but a spokeswoman for Louis Vuitton said Jackson-themed pieces would not be up for sale, Reuters said.

* Topshop parent Arcadia Group Ltd., owned by retail tycoon Sir Philip Green, is "exploring several options" that will enable the business to operate more efficiently, The Guardian reported, citing a company statement. "None of the options being explored involve a significant number of redundancies or store closures," Arcadia reportedly said. The report added that Green is looking into a company voluntary arrangement, a statutory agreement that will allow the U.K. retailer to reduce its debt, close underperforming stores and seek reduced rents.

* Furla SpA will continue to operate as a family-run business despite being "heavily courted" by Italian and foreign bidders, Chairwoman Giovanna Furlanetto told Reuters in an interview. Furlanetto, who is also the luxury-bag maker's top shareholder, reportedly said Furla sees no urgency in being listed and that family members who have a stake in the company gave no signs of wanting to cash in.

* JD Sports Fashion PLC said it agreed to buy Footasylum PLC for a cash consideration of 82.5 pence per share. Directors of Footasylum intend to unanimously recommend that shareholders accept the deal, which values the apparel retailer at up to about £90.1 million on a fully diluted basis. The announcement comes after JD Sports raised its stake in Footasylum to 18.74% in February.

E-COMMERCE

* Amazon is testing a new pilot program that links private investors to companies that use its Amazon Web Services Inc. as well as venture funds whose portfolios are filled with potential cloud customers, CNBC reported. Amazon is not investing directly in the initiative, called the Amazon Web Services Pro-Rata Program, which reportedly targets specific companies and funds raising capital and seeks to connect them with potential investors. An Amazon spokesperson declined to comment, according to the report.

* Yatra Online Inc. said it entered into a mutual confidentiality agreement with Ebix Inc., allowing the Indian travel services provider to further consider the insurance technology company's takeover offer. The agreement also enables the two parties to commence due diligence on the deal.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Embattled retailer Steinhoff International Holdings NV overstated profits and assets over a number of years, findings from a forensic investigation by PricewaterhouseCoopers show. According to PwC's report, a small group of Steinhoff former executives and other non-Steinhoff executives, led by a senior management executive, implemented certain fictitious or irregular transactions that resulted in profit and asset values of Steinhoff being substantially inflated over an extended period. The transactions over a period covering fiscal 2009 through fiscal 2017 amounted to €6.51 billion, the report posted on Steinhoff's website shows. According to the summary report, Steinhoff is still determining the full financial impact of the findings of the investigation.

* Sports Direct International PLC will seek to acquire Debenhams PLC if the department store operator enters administration, Sports Direct interim CEO Chris Wootton told the Financial Times (London). The news comes after Debenhams' board said it will "give careful consideration" to the sportswear retailer's offer to provide a £150 million unsecured term loan of 12 months to the struggling company in exchange for a 5% stake in Debenhams. The agreement also includes the appointment of founder Mike Ashley as Debenhams' CEO and director. Wootton reportedly said Sports Direct intends to name additional nonexecutive directors to Debenhams' board if the company will be led by Ashley, who also has a view that only a small number of Debenhams stores should close.

* Sports Direct International's Mike Ashley offered to buy L.K. Bennett Ltd. out of administration, the Financial Times (London) reported, citing people familiar with the matter. One of the sources reportedly added that founder Linda Bennett has not submitted a bid for the apparel company. Sports Direct, Bennett, and administrator Ernst & Young all declined to comment on the matter, the newspaper said.

LEISURE PRODUCTS AND FACILITIES

* Amer Sports Corp. plans to sell its Mavic SAS cycling business to private equity firm Regent after conducting a strategic review of the unit. Amer Sports, which is in the process of being acquired by Anta Sports Products Ltd., divested its cycling business as part of its plan to focus its portfolio on faster-growth areas. Mavic SAS represented only 3% of the group's sales, according to the release.

HOTELS, RESORTS AND CRUISE LINES

* Activist investor Jonathan Litt wants a seat on Marriott International Inc.'s board and is calling for the hotel operator to reduce the number of brands it owns, The Wall Street Journal reported. Litt's firm, Land & Buildings Investment Management LLC, owns a less than 1% stake in Marriott and nominated Litt earlier in 2019 for a seat on the hotelier's board, the publication said, citing people familiar with the matter. The hotelier is evaluating Litt's nomination and believes it has a "strong, diverse and independent board of directors with deep experience," the publication said, citing Marriott.

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The day ahead

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

In Asia, Hang Seng rose 1.37% to 29,409.01, while the Nikkei 225 gained 0.62% to 21,584.50.

In Europe, around midday, the FTSE 100 increased 0.59% to 7,271.06, and the Euronext 100 lifted 0.10% to 1,048.25.

On the macro front

The Housing Market Index is 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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