TOP NEWS
* Former Sears Holdings Corp. Chairman and CEO Eddie Lampert, through Transform Holdco LLC, an affiliate of his hedge fund ESL Investments Inc. is suing the Sears estate for breaches of contract and other offenses in connection to their asset purchase agreement that pulled Sears out of bankruptcy. In an adversary complaint filed with the U.S. Bankruptcy Court for the Southern District of New York, Transform said the Sears estate failed to deliver "hundreds of millions of dollars of assets" in connection to the asset sale. "In doing so, ESL has expended tremendous resources in order to resurrect an American icon and keep in place tens of thousands of jobs that would have been lost had the defendants pursued liquidation," Transform said in the court filing. Sears did not immediately respond to S&P Global Market Intelligence's request for comment.
* Walmart Inc. appointed Suresh Kumar as its chief technology officer and chief development officer, reporting to Doug McMillon, president and CEO of the company. Kumar has served in various leadership roles in Amazon.com Inc., Microsoft Corp. and International Business Machines Corp. Most recently, he was vice president and general manager of display, video, app ads and analytics at Google LLC.
TEXTILES, APPAREL AND LUXURY GOODS
* Mid-market investor Versa Capital Management LLC acquired Alex Apparel Group Inc. for an undisclosed sum. The acquired company was backed by mid-market private equity firm Atlantic Street Capital Management LLC. Alex Apparel is a women-focused apparel company that designs, sources and distributes branded eveningwear dresses and separates under the Alex Evenings brand in more than 3,400 department stores and specialty boutiques in the U.S.
* Advertising company Marquee Brands LLC entered into a strategic partnership with Fosun International Ltd.'s Fashion Group to launch brands like Ben Sherman, Bruno Magli, Dakine, BCBG Max Azria and BCBG Generation in China, Women's Wear Daily reported. Marquee expects to have "some level of brand presence" in the country by 2020, Michael DeVirgilio, president of Marquee Brands, reportedly said.
MULTILINE RETAIL
* Swiss department store operator Maus Frères SA acquired apparel retailer Kooples for an undisclosed amount, Drapers reported. The retailer, which owns the Lacoste brand, reportedly also appointed former LVMH Moët Hennessy Louis Vuitton SE vice president Romain Guinier as the French fashion chain's new CEO. Maus Frères plans to add Kooples to its international brands division, the report said.
E-COMMERCE
* S&P Global Ratings affirmed eBay Inc.'s long-term issuer credit rating at BBB+ and maintained its stable outlook, citing the U.S. online retailer's leading e-commerce brand and its platform investments. The agency said its rating reflects eBay's leading brand, unique inventory and high EBITDA margins above 30%, which are partly offset by its formidable competition, reliance on consumer spending and limited EBITDA growth over the past five years. Ratings expects the retailer's payments intermediation to reach meaningful scale in 2021 and 2022 and support good revenue and profit growth.
* Amazon.com Inc. and Walmart Inc.-owned Flipkart Online Services Pvt. Ltd. are unlikely to fully cooperate in an antitrust study by the Indian government over worries their trade secrets will be revealed, Reuters reported, citing sources with direct knowledge of the matter. According to the report, the e-commerce companies will likely withhold information in a "fact-finding" survey distributed by the Competition Commission of India to online businesses operating in the country. The companies did not immediately respond to requests for comment from S&P Global Market Intelligence.
* MacKenzie Bezos, who owns about 4% of the shares in Amazon.com Inc., a stake worth more than $36 billion, signed up to the Giving Pledge, an initiative for the rich to commit more than half their wealth to charities. “I have a disproportionate amount of money to share,” Bezos said in a Giving Pledge letter. Bezos' interest in Amazon is part of her divorce settlement from Amazon founder, Chairman and CEO Jeff Bezos.
* U.S. e-commerce company Revolve Group LLC set its IPO price between $16 and $18 per share. The company, which plans to list on the New York Stock Exchange under the ticker symbol RVLV, would be valued at $1.2 billion at the midpoint of the estimated price range. The company estimates that the proceeds from the offering will be about $43 million, of which $40.8 million will be used to repurchase 2,400,960 shares from TSG and Capretto. "The principal purposes of this offering are to increase our financial flexibility, create a public market for our Class A common stock and improve our brand awareness," the company said in the filing.
HOUSEHOLD AND PERSONAL PRODUCTS
* Moody's placed Avon Products Inc.'s B1 corporate family rating, its B1-PD probability of default rating and B3 senior unsecured notes ratings under review, with direction uncertain. The agency also placed the Ba1 rating on the $500 million senior secured notes due 2022 issued by company's subsidiary, Avon International Operations Inc., under review, with direction uncertain. The review was prompted by Natura Cosméticos SA's agreement with Avon to acquire the company in an all-share deal. The agency said the potential acquisition could result in a combined group with a stronger business profile and financial leverage than Avon, while a failed transaction may result in "a further weakening trend in Avon's earnings or liquidity."
FOOD AND STAPLES RETAILING
* German food retailer REWE-Zentral-AG will acquire food supplier Lekkerland AG & Co. KG for an undisclosed amount. The deal is subject to approval by the antitrust authorities.
* French food retailer Casino Guichard-Perrachon SA said it will not pay an interim dividend in 2019 to reduce its debt. The announcement follows S&P Global Ratings' downgrade of Casino's ratings to B from BB-, citing parent Rallye SA's entry into safeguard proceedings. The company was also placed on CreditWatch negative on the view that Casino may be indirectly affected by Rallye entering bankruptcy protection.
HOUSEHOLD DURABLES AND SPECIALTY RETAIL
* Sports Direct International PLC agreed to sell its Shirebrook property to Kwasa Logix Sportivo Ltd. for a cash consideration of £120.1 million. The retailer will take a 15-year lease of the property and continue to operate it as a distribution center and use it for offices and retail. Proceeds from the sale, expected to be completed on or before June 21, will be used for the company's working capital and group operations.
CASINOS AND GAMING
* Wynn Resorts Ltd. acknowledged the decision of the Massachusetts Gaming Commission to impose a $35 million fine on the company, following its yearlong investigation into sexual misconduct allegations against Wynn Resorts founder and former CEO Steve Wynn and how the casino operator handled those accusations. In the April 30 announcement, the commission said it will allow Wynn Resorts to retain its gaming license in the state but would impose a $500,000 fine on new Wynn Resorts CEO Matthew Maddox for failing to take action on a sexual harassment complaint. Wynn Resorts said it will not file an appeal but noted that it does not agree with the finding that Maddox, who replaced Steve Wynn when he stepped down in February last year, violated company policy.
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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 lost 0.57% to 27,235.71, while the Nikkei 225 dropped 1.21% to 21,003.37.
In Europe, around midday, the FTSE 100 shed 1.29% to 7,174.82, and the Euronext 100 declined 1.34% to 1,024.96.
On the macro front
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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