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Softbank to make ¥1.2 trillion in Alibaba share sale; Forever 21 may restructure


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Essential IR Insights Newsletter - Summer July-August 2023

Softbank to make ¥1.2 trillion in Alibaba share sale; Forever 21 may restructure


* SoftBank Group Corp. expects to gain a pretax profit of approximately ¥1.2 trillion after reducing its stake in Alibaba Group Holding Ltd. to 26%. The Japanese company said it sold 73 million Alibaba shares via its wholly owned subsidiary, West Raptor Holdings LLC, leaving it with 674 million shares in the Chinese retailer after the transaction closes. According to S&P Global Market Intelligence data, Softbank held a 28.82% stake in Alibaba before the transaction.

* Forever 21 Inc. held discussions with Apollo Global Management LLC about a potential debtor-in-possession financing, in the event it seeks bankruptcy, Bloomberg News reported, citing people familiar with the matter. The Los Angeles-based chain reportedly is also in talks with potential lenders and restructuring advisers to explore strategic options for the company, specifically financing that would increase its liquidity and maintain founder Do Won Chang's control of Forever 21. An Apollo spokesman declined to comment on the matter, while Forever 21 said it is "speaking with our lenders in the normal course of business and are in compliance with all of our agreements," according to the report.


* PVH Corp. said its Calvin Klein Inc. subsidiary entered into an initial five-year license agreement with G-III Apparel Group Ltd. for the production and distribution of Calvin Klein's women's jeans business in the U.S. and Canada. The launch of G-III's first women's Calvin Klein Jeans collection will be in the spring of 2020.

* Fast Retailing Co. Ltd. said same-store sales, including online sales, at its Uniqlo apparel chain in Japan fell 1.8% year over year in May after it postponed its anniversary sale, but its strong summer sales softened the blow.

* Pandora A/S announced that investment firm BlackRock Inc. again lowered its stake in the jeweler to below 5% after reducing it to 5.30% in April. Blackrock holds a 4.24% stake in Pandora, according to S&P Global Market Intelligence data.


* Transform Holdco LLC, an affiliate of Sears and Kmart Stores parent ESL Investments Inc., will buy the remaining 42% of Sears Hometown and Outlet Stores Inc. for $2.25 per share in cash. The all-cash transaction, expected to complete during the target company's third quarter, will reunite Sears and Kmart with Sears Hometown, which was spun off from Sears Holdings in 2012.


* Alibaba Group Holding Ltd. may soon sell electronic cigarettes on its Tmall platform, news site KrASIA reported, citing a filing by subsidiary Zhejiang Tmall Network Technology that mentioned an expanded business scope.

* Etsy Inc. named Ryan Scott to the newly created role of chief marketing officer, effective June 24. Scott previously served in the same role at pizza ordering platform Slice.

* Inc. will drop its minimum purchase requirement for its Prime Free One Day delivery service, available in over 10,000 cities and towns in 44 major metropolitan areas across the U.S., as well as in 17 other countries.

* Inc. plans to raise the number of its small shops to 15,000 by the end of 2019 in a bid to drive sales growth in physical stores, the Nikkei Asian Review reported, citing a company representative. The representative reportedly also said the company will open a 50,000-square-meter store in the city of Chongqing, China, later this year, with plans of launching more outlets in every big Chinese city.

* Chewy Inc. announced that it expects to price its IPO of 5.6 million of its class A common shares at $17 to $19 each. The PetSmart Inc.-owned e-commerce company, which plans to trade on the New York Stock Exchange under the symbol CHWY, will use net proceeds from the offering for working capital and other general corporate purposes.

* Online sporting goods retailer Netshoes (Cayman) Ltd. said its board recommended against the proposed takeover by Brazilian retailer Grupo SBF SA, and to instead approve Magazine Luiza SA's offer. The company said any potential transaction between Netshoes and SBF would require calling a new shareholders meeting and a review by Brazilian antitrust authorities, making it a cause of delay and uncertainty. Magazine Luiza will continue with its plan to acquire Netshoes for $3 per share, pending approval at the company's shareholder meeting June 14, after which the transaction is expected to close within five days.


* CVS Health Corp. said it expects adjusted EPS of at least $7.00 in 2020, mid-single-digit percent adjusted EPS growth in 2021 and low-double-digit percent growth in 2022 and beyond by balancing near-term execution with long-term value creation. The company also reaffirmed its full-year 2019 guidance of consolidated revenues in the range of $251.2 billion to $254.4 billion and adjusted EPS between $6.75 and $6.90 ahead of the company's investor day, where CVS expects to outline its growth strategy.

* Waitrose Ltd. said it launched its Waitrose Unpacked pilot program, which will run for 11 weeks until Aug. 18 and aims to cut the use of plastic and packaging at the U.K. grocer's stores. The pilot includes a frozen "pick and mix" area, where all offered fruits are packaging free, and a borrow-a-box system, where customers can borrow a container from the store and return it on their next visit.


* Walmart Inc. named Scott Eckert as head of its investment arm and startup incubator, Store No. 8, Reuters reported, citing an internal company memo to employees. Eckert, who is a former executive at Bain Capital Ventures, reportedly will succeed Lori Flees.

* Walmart Inc. is extending its Live Better U education program to high school students, providing them access to jobs with schedule flexibility, prep courses, and debt-free college degrees in three fields from six nonprofit universities, among other things. The program will also be expanded to 14 new debt-free technology degrees and certificates. It will also create scholar awards, a graduation bonus scheme where eligible associates will receive awards valued at $1,500 each.


* Gree Electric Appliances Inc. of Zhuhai's parent, Gree Group, is in advanced talks to sell a 15% stake in the household appliances producer to a consortium led by buyout firm Hopu Investment Management Co., Bloomberg News reported, citing sources. Sources reportedly said Temasek Holdings (Pte.) Ltd. is part of the consortium, and negotiations may not result in a deal. Representatives for Hopu, Gree and Temasek all reportedly declined to comment.

* Tiffany & Co. maintained its guidance for fiscal 2019 despite reporting earnings for the first quarter that came in 12% lower year over year to $125 million, or $1.03 per share, from $142 million, or $1.14 per share. The S&P Global Market Intelligence consensus GAAP net income estimate for the period was $124.9 million. The New York-based jeweler said it still expects global net sales growth in the low-single-digit percentage over the prior year and net diluted EPS to increase in the low- to mid-single-digit percentage.


* Brunswick Corp. appointed Alexander Marchetti, previously assistant corporate controller at the leisure products company, as its senior director of investor relations with immediate effect.


* Allied Hotel Properties Inc. is seeking offers for its Toronto Don Valley Hotel and Suites, including its adjacent development lands, with the help of U.K. real estate company CBRE Ltd. Allied Hotel Properties, which has not set a definitive schedule for the identification of potential buyers or for the sale of the property, added that a call for offers does not guarantee that a transaction will happen.


* Retail sales in Australia slid 0.1% in seasonally adjusted terms to A$27.33 billion in April, compared to a rise of 0.3% in March, according to the Australian Bureau of Statistics. In trend terms, sales rose 0.2% in April, with the food retailing segment and the cafes, restaurants and takeaway food services segment posting the biggest growth.

The day ahead

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

In Asia, the Hang Seng fell 0.49% at 26,761.52, while the Nikkei 225 dropped 0.01% to 20,408.54.

In Europe, around midday, the FTSE 100 lifted 0.12% to 7,193.65, and the Euronext 100 gained 0.09% to 1,027.18.

On the macro front

The motor vehicle sales report, the Redbook Index for retail sales and the factory orders report 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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