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Abercrombie turnaround faces headwinds; Alibaba's Ele.me launches drone delivery

TOP NEWS

* Abercrombie & Fitch Co. has been unable to offset "persistent traffic headwinds" in its A&F flagship locations even after launching loyalty programs and investing in stores to improve conversion, COO Joanne Crevoiserat said during the company's call to discuss first-quarter earnings. For the 13 weeks ended May 5, the apparel retailer posted an adjusted non-GAAP net loss per diluted share of 56 cents, lower than the S&P Capital IQ mean consensus normalized estimate of a loss of 77 cents per share. The company, which sells upscale casual wear, expects net sales to be up in the range between 2% and 4% for fiscal 2018, while second-quarter net sales are anticipated to increase in the high single digits.

* Alibaba Group Holding Ltd.'s online food delivery subsidiary Ele.me has launched a drone delivery service, the first of its kind approved by the Chinese government, financial news service Jiemian reported, citing the company. Ele.me has 17 drone routes, all of which are within the rurally located Shanghai Jinshan Industrial Park and will have three to four flights per day, according to the report. The routes cover commercial districts, office buildings and residential communities in a 58-square-kilometer area, and there are plans to extend the service to also cover schools sometime between August and October.

TEXTILES, APPAREL AND LUXURY GOODS

* Compagnie Financière Richemont SA completed the sale of its wholly owned French luxury leather goods and handbags maker Lancel to Italian travel leather goods company Piquadro SpA. In an earlier announcement, the Swiss company also entered into an agreement to acquire 100% of the share capital of U.K.-based Watchfinder.co.uk Ltd., an online retailer of pre-owned watches, in a private transaction with its shareholders. Financial terms of the deals were not disclosed, but Richemont said the transactions will have no material impact on results for the fiscal year ending March 31, 2019.

MULTILINE RETAIL

* Buy-out specialists Flacks Group and Alteri Investors are fighting for control over struggling discount chain Poundworld Retail Ltd after parent TPG Capital Management LP put it up for sale, The Daily Telegraph reported. The two firms reportedly are "in prime position to strike a deal" with TPG, which initially planned to close 100 Poundworld stores from its total 355 shops in an attempt to stabilize the retailer's financial position.

E-COMMERCE

* Zalando SE will open shops in Ireland and Czech Republic in the summer of 2018, expanding its reach to 17 European countries. The e-commerce fashion firm will also offer customers in Germany access to an English-language version of its German site and its Swiss shoppers access to an Italian-language version of its local shop. Lastly, Zalando will offer items from Swedish fashion brand Monki, owned by H&M Hennes & Mauritz AB, on all of its European platforms beginning in August.

* BGF Co., the investment arm of South Korean convenience store operator CU, agreed to purchase 30 billion won of new stocks in Hello Nature Co., a subsidiary of SK Group affiliate SK Planet Co., Yonhap News Agency reported. As part of the agreement, BGF and SK Planet will run Hello Nature, which operates as an online grocery shopping platform, as a joint venture.

* Alibaba Group Holding Ltd. led a $300 million Series D funding round for Chinese social shopping app Xiaohongshu, giving the platform a valuation of more than $3 billion, the South China Morning Post reported. Other investors in the startup, the name of which means "little red book" in Mandarin Chinese, include Tencent Holdings Ltd., GSP Ventures, GGC Capital, Genesis Capital, Tiantu Capital, Zhen Fund and K11 Art Foundation founder Adrian Cheng. Shanghai-based Xiaohongshu plans to put the funding toward "talent acquisition, machine-learning infrastructure and user growth," the SCMP reported, citing a company statement.

FOOD AND STAPLES RETAILING

* HelloFresh SE will sell its meal kits at Koninklijke Ahold Delhaize NV-owned Giant Food Stores LLC and Stop & Shop Supermarket Co. LLC locations in the U.S. The product will be available at 581 stores in June and the company said it plans to add more retailers in 2018.

* Japan's FamilyMart UNY Holdings Co. Ltd. and discount chain Don Quijote Holdings Co. Ltd. jointly launched two experimental stores in Tokyo's Meguro Ward and Tachikawa City on June 1, The Japan Times reported. The two outlets, with another one slated to open in Setagaya Ward later in June, are revamped FamilyMart convenience stores styled like Don Quijote shops, where items are stacked from the floor up to make the place look packed with goods. FamilyMart reportedly expects to draw women and young customers with the greater offering from the pilot outlets, while Don Quijote intends to learn about small-scale store management from the food retailer.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Newell Brands Inc. said its CFO and executive vice president, Ralph Nicoletti, will retire at the end of 2018. Nicoletti's exit follows the departure of Mark Tarchetti, who resigned as president of the consumer goods company, effective May 25. Newell also said it will consider internal and external candidates to succeed Nicoletti.

* Sports Direct nominated Ron McPherson, Howard Moher, Mark Hunter and Daniel Dienst to the board of Iconix Brand Group Inc. after the brand management firm's share price fell to below 70 cents. Sports Direct, a long-term Iconix stockholder, explained that the nominations are an attempt to "help reverse the trend of underperformance and value destruction." In response, Iconix said it will review the retailer's nominations in due course.

HOTELS, CASINOS AND GAMING

* Spanish hotel operator Barceló Group is considering to make an offer to acquire the €670 million stake in NH Hotel Group SA owned by its biggest shareholder HNA Group Co. Ltd., Bloomberg News reported, citing sources familiar with the matter. Barceló is said to be in discussions with advisory company Alantra Partners SA for HNA's nearly 30% interest in the rival hospitality chain, according to the sources. Barceló, which made a failed bid to merge with NH Hotel in January after the latter's board declined the proposal, has yet to finalize its decision and there is no confirmation on whether it will push on with its offer.

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The day ahead

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

In Asia, the Hang Seng was up 1.66% to 30,997.98. The Nikkei 225 rose 1.37% to 22,475.90.

In Europe, as of midday, the FTSE 100 was up 0.31% to 7,701.77, and the Euronext 100 climbed 1.02% to 1,059.77.

On the macro front

The factory orders report is due out today.

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