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Mattress King parent files for bankruptcy; Alibaba-backed startup plans for IPO

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Mattress King parent files for bankruptcy; Alibaba-backed startup plans for IPO

TOP NEWS

* Innovative Mattress Solutions LLC, or IMS, has filed for Chapter 11 bankruptcy protection, citing poorly timed expansions in 2016 as "the national mattress market [suffered] with the general brick-and-mortar retail market." The Mattress King parent, which operates 142 stores and six distribution centers, employs about 400 people. According to a report by The Wall Street Journal, IMS will receive $14 million in bankruptcy financing from primary supplier Tempur Sealy International Inc., which also said an asset sale will be allowed "in a controlled and deliberate manner."

* Alibaba Group Holding Ltd.-backed Megvii Technology Ltd. plans to file for an IPO in Hong Kong that could net between $500 million and $1 billion, Bloomberg News reported, citing people familiar with the matter. The artificial intelligence startup, which owns facial recognition developer Face++, provides face-scanning systems to companies such as Lenovo Group Ltd. and Alibaba's payments affiliate Ant Financial. Megvii rival and fellow Alibaba-backed AI startup SenseTime Group Ltd. is also said to be in talks to raise about $2 billion, according to the report. A SenseTime spokesperson reportedly told the newswire in a text message that the company is considering options to raise funds "but have not committed to a final plan."

TEXTILES, APPAREL AND LUXURY GOODS

* Chico's FAS Inc. plans to close at least 250 of its U.S. stores over a three-year period to "rebalance the mix between its physical store presence with its digital network." The apparel retailer made the announcement as it unveiled plans to build on its omnichannel platform with investments in online technology and create further partnerships with e-commerce retailers. Chico's also gave an update on its sales guidance for the fourth quarter of 2018, noting that "net sales and comparable sales are trending better than its previous outlook."

* U.K. retailer New Look Retail Group Ltd. reached a debt-for-equity agreement with stakeholders to cut the company's debt by 80% to £350 million from £1.35 billion. The company also plans to raise £150 million of capital by issuing new bonds, while an initial £80 million of interim funding — which will be refinanced by the bond issue — will be used to pay costs and provide additional financial resources. The transaction is expected to complete during the first quarter of fiscal 2020, or between April and June 2019.

MULTILINE RETAIL

* Target Corp. launched its new size-inclusive swimwear brand, Kona Sol. The collection is available at all Target stores and online, with items' prices ranging between $17.99 and $39.99.

E-COMMERCE

* Amazon.com Inc. invested another 3 billion Indian rupees in capital into Amazon Pay in India, The Economic Times reported, citing filings to the county's Register of Companies. The investment follows a series of capital infusions by the e-commerce giant in its Indian payments arm.

HOUSEHOLD AND PERSONAL PRODUCTS

* Coty Inc. appointed Pierre-André Terisse as its new CFO, effective Feb. 1, replacing Patrice de Talhouët, who announced his retirement in August 2018. The maker of cosmetics brand CoverGirl also named Luc Volatier the company's new chief global supply officer, effective Jan. 14, succeeding Mario Reis, who is stepping down from the role. Gianni Pieraccioni, former COO of Revlon Inc., was named the new COO of Coty's consumer beauty division, also effective Jan. 14.

FOOD AND STAPLES RETAILING

* Walgreens Boots Alliance Inc. is testing technology provided by Microsoft Corp.-backed startup Cooler Screens Inc. that embeds cameras, sensors and digital screens in the doors of coolers to show targeted advertisements, The Wall Street Journal reported. The cameras and sensors inside the coolers use face-detection technology to determine shoppers' purchases, giving insight to advertisers, while the digital screens serve as in-store billboards. Aside from Walgreens, Nestlé SA, MillerCoors LLC and Conagra Brands Inc. reportedly are also testing the digital Cooler Screens platform.

HYPERMARKETS AND SUPERCENTERS

* Walmart Inc. is looking to hire 2,000 additional technology experts this year to help expand its online business and better compete with rivals such as Amazon.com Inc., Chief Technology Officer Jeremy King said in a Bloomberg Television interview. The U.S. retail giant plans to hire data scientists, software engineers, designers and other experts to work in nine offices from Silicon Valley to Bangalore in India, King said.

* Wesfarmers Ltd. expects to record a gain of A$2.1 billion to A$2.3 billion from the demerger of Coles Group Ltd. in November 2018. Retail chain Coles started trading on the Australian Stock Exchange last year as a separate entity from Wesfarmers, which acquired the business in 2007. Wesfarmers also expects A$130 million to A$150 million in the provision relating to Coles' supply chain modernization.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Cosmetics and skincare products maker L'Occitane International SA agreed to acquire British brand Elemis Ltd. from Steiner Leisure Ltd., a portfolio company of private equity firm L Catterton, for $900 million. In a statement, L'Occitane Chairman and CEO Reinold Geiger said the company aims to expand Elemis' global footprint following the transaction. The deal is expected to close in the first quarter of 2019.

* Administrators of HMV Group PLC have given interested buyers until Jan. 15 to submit their bids for the music store chain, Sky News reported. A KPMG spokeswoman reportedly declined to comment about the deadline. Meanwhile, experts said they expect parent HMV Digital China Group Ltd. to hold Hong Kong's biggest liquidation sale in a decade, according to a previous report by the South China Morning Post.

* Ceconomy AG "hit pause" on its planned alliance with Fnac Darty SA, Reuters reported, citing a company spokeswoman. The German retailer, which owns a 24% stake in Fnac Darty, is expected to form the European Retail Alliance, with M.video PJSC as the third member.

* JD Sports Fashion PLC reported like-for-like sales growth of more than 5% during the holiday period, driven by a consistently positive performance during Black Friday and Christmas. For the 48 weeks to Jan. 5, the specialty retailer posted a 15% increase in total sales, excluding the recent acquisitions of The Finish Line Inc. in the U.S. and Sport Zone in Iberia.

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The day ahead

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

In Asia, the Hang Seng was down 1.38% to 26,298.33, while the Nikkei 225 was closed today.

In Europe, as of midday, the FTSE 100 slid 0.98% to 6,850.48, and the Euronext 100 declined 0.96% to 926.19.

On the macro front

There are no notable economic reports 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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