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Lampert's fund ups Sears bid to an 'excess' of $5B; Richemont Q3 sales up 6% YOY

TOP NEWS

* ESL Investments Inc. upped the value of its bid for Sears Holdings Corp. to an "excess" of $5 billion, agreeing to take on additional liabilities and purchase some of Sears' real estate. In a letter dated Jan. 9 to Sears' investment bank Lazard Freres & Co. LLC and filed with the SEC on Jan. 10, ESL said it would assume up to $663 million in new liabilities under the deal. "We believe our proposal will provide substantially more value to stakeholders than any other option, in particular a liquidation," an ESL spokesman said in an email to S&P Global Market Intelligence. A Sears spokesman did not immediately respond to a request for comment on the revised bid.

* Compagnie Financière Richemont SA reported double-digit sales growth for the third quarter of fiscal 2019, primarily due to the integration of YOOX Net-A-Porter Group SpA and Watchfinder.co.uk Ltd. Excluding YNAP and Watchfinder, like-for-like sales for the three months to Dec. 31, 2018, rose 6% at actual exchange rates and 5% at constant exchange rates. Total group sales, including YNAP and Watchfinder, increased 25% year over year, or 24% at constant exchange rates, to €3.92 billion. In lunchtime trading, Richemont shares were up 2.2% to CHF67.26.

TEXTILES, APPAREL AND LUXURY GOODS

* L Brands Inc. reported December 2018 net sales of $2.48 billion, down from $2.52 billion in the same period a year ago, as it guided to adjusted fourth-quarter EPS to reach the higher end of its $1.90 to $2.10 outlook. The guidance excludes a preliminary estimated pretax charge of approximately $80 million, or 15 cents per share, related to the sale of its La Senza lingerie business to an affiliate of private equity firm Regent LP. For the 48 weeks ended Jan. 5, the company posted $12.46 billion in net sales, up from $11.52 billion in 2017.

* U.S. children's apparel retailer The Gymboree Corp., which eliminated more than $900 million in debt after completing its financial restructuring in September 2017, may file for Chapter 11 protection again in the coming days, sources told the Financial Times (London). According to a previous report by The Wall Street Journal, the company sought a loan in December 2018 to keep it afloat as it looks for a buyer and prepares its bankruptcy filing.

* Calvin Klein Inc. will rebrand its 205W39NYC line and shutter its flagship store along Madison Avenue in New York as part of a series of strategic changes to the brand. The PVH Corp.-owned company on Jan. 10 announced the plan, which includes relaunching its 205W39NYC business under a new name and creative direction. In a separate release, PVH said it expects to incur about $120 million over the next 12 months in relation to the Calvin Klein plan and raised its non-GAAP EPS outlook for fiscal 2018 to $9.50.

MULTILINE RETAIL

* Debenhams PLC Chairman Ian Cheshire resigned with immediate effect after he failed to secure re-election from shareholders at the U.K. department store operator's annual general meeting. CEO Sergio Bucher's re-election also was defeated by shareholders, but Debenhams said in a statement that the board and Bucher agreed that Bucher should continue in his role. Terry Duddy, Debenhams' senior independent director, was appointed interim chairman.

E-COMMERCE

* A court in Germany ruled that Amazon.com Inc.'s thumb-sized press-to-order devices, called Dash button, are violating consumer protection laws in the country as they do not give sufficient information about the product being ordered or its price, Reuters reported. The decision came after a regional consumer protection watchdog filed a suit against the e-commerce giant, arguing that the buttons put consumers at a "disadvantage." Dash, launched in 2015, is a Wi-Fi-enabled device that allows Prime members to reorder products, such as laundry detergent, coffee and dishwasher tablets, at the push of a button.

* Amazon will invest in robotics firm Balyo over the next seven years to use the French company's technology for self-driving forklift trucks, Reuters reported. As part of the deal, Amazon reportedly will receive free stock warrants representing up to 29% of Balyo's capital, which it can exercise depending on orders of the company's products.

* Alibaba Group Holding Ltd. will launch its "A100" strategic partnership program, in which clients can use the e-commerce giant's operating system within their own businesses. A100 partners will have access to various services relating to payments, logistics, sales, supply chain optimization, marketing and other cloud-based technologies, allowing them to combine online and offline systems in what it calls a "new retail" model.

FOOD AND STAPLES RETAILING

* BGF Retail Co. Ltd. is collaborating with the South Korean unit of Germany's Delivery Hero SE to offer delivery services across the country and co-develop various food items, The Korea Herald reported. The service will be launched in South Korea in March by initially offering to deliver boxed lunches, triangle gimbaps and sandwiches and will be expanded in steps nationwide.

* John Lewis Partnership PLC, which owns the Waitrose supermarket chain, may suspend its staff bonus in 2019 due to weak consumer demand, slower sales growth and higher costs. "The board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time," Chairman Charlie Mayfield said. The company reported a 1.4% year-over-year increase in total sales for the seven weeks ended Jan. 5.

CASINOS AND GAMING

* Activist investor Starboard Value LP is building a stake in MGM Resorts International as the Las Vegas-based hotelier faces investor scrutiny over its MGM 2020 growth strategy, Reuters reported Jan. 10, citing two people familiar with the matter. Starboard's plans for the stake are still unclear, but MGM Resorts is aware of the investment, the source reportedly said. The report comes a week after the casino operator unveiled a new growth initiative that is expected to deliver a total annualized EBITDA increase of $300 million. In a statement to Reuters, MGM Resorts said the company "does not comment on market rumors," while Starboard did not respond to a request for comment.

INDUSTRY NEWS

* Markets hammered U.S. retail stocks across the board after Macy's Inc. cut its full-year earnings outlook following the holiday selling period and Kohl's Corp. reported November and December 2018 sales growth that marked a slowdown from the previous year. Macy's stock slumped 17.7% to $26.11 per share after the department store chain slashed full-year diluted EPS forecast to $3.95 to $4, from a previous forecast of $4.10 to $4.30. Kohl's shares dropped more than 6% despite the retailer posting a 1.2% comparable sales increase year over year for November and December and raising the low end of its fiscal 2018 diluted EPS guidance to between $5.50 and $5.55. Elsewhere, Barnes & Noble Inc. shares fell 15.8% to $6.36 after warning that increased spending on advertising and promotions, including price markdowns, could cut the company's earnings guidance as much as 10%.

* Chile is considering imposing a tax of up to 19% on global e-commerce companies that have operations in the country, nearly twice the initial figure proposed and matching the value-added tax paid by local companies, Reuters reported, citing Finance Minister Felipe Larrain.

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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 increased 0.55% to 26,667.27, and the Nikkei 225 increased 0.97% to 20,359.70.

In Europe, around midday, the FTSE 100 was down 0.24% to 6,926.01, and the Euronext 100 was down 0.07% to 935.47.

On the macro front

The Baker-Hughes Rig Count report and the CPI consensus 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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