About HOT TOPIC, INC.

What's the Hot Topic? "Everything About the Music," according to this teen-focused web and mall-based retailer. Hot Topic's 800-plus stores in the US and Canada sell rock-inspired clothing and accessories in settings resembling the industrial clubs where kids (ages 12 to 22) rock out. It also runs more than 200 Torrid shops offering apparel and accessories for plus-sized females (as old as 30!). Though focused on selling licensed concert apparel from current and classic rockers including Iron Maiden, Nirvana, and Metallica, Hot Topic also sells tees celebrating pop culture and trendy apparel that appeals to various musical subcultures. Hot Topic is owned by private equity firm Sycamore Partners.

Change in Company Type

In June 2013, Hot Topic sold itself to the private equity firm Sycamore Partners for about $600 million. Sycamore, which had recently purchased the struggling women's apparel chain Talbots, paid Hot Topic shareholders $14 per share.

Geographic Reach

Hot Topic has stores in the US and in Canada.

Operations

Hot Topicis a mall- and web-based specialty retailer operating the Hot Topic and Torrid concepts. Hot Topic offers music/pop culture licensed and influenced apparel and accessories. Torrid retails on-trend fashion apparel, lingerie, and accessories for the young, voluptuous woman who wears size 12 and up.

Financial Performance

In its last year as a public company, Hot Topic's net sales increased 6%, to $741.7 million, in fiscal 2013 (ended January). The gain reversed several years of falling sales and profits. Driving the sales gain were increases from new Torrid and Hot Topic shops, as well as same-store sales gains at each, and the inclusion of an extra week in fiscal 2013 versus 2012.

Strategy

After several years of shrinking its retail footprint, the company plans to begin aggressively growing its stronger-performing Torrid chain in fiscal 2013. About 50 new Torrid opened over the course of the year, while its larger sister-chain Hot Topic will continue to shrink by about a dozen locations. Torrid fills a niche not covered by many other plus-size apparel retailers, offering pop culture-inspired fashion forward apparel and accessories for larger girls and young women. The relative lack to head-to-head competition helps to explain Torrid's better performance compared with Hot Topic, which trades in a more crowded market. The company is looking to CEO Lisa Harper (who joined the company in 2011) and other recent hires to reverse its long sales slump. Its strategy is to return the Hot Topic brand to its "edgy, dark and sexy core," while upping the fashion quotient at Torrid.

In mid-2015 the company moved to spread the Hot Topic brand to more customers when it announced plans to acquire comic and video game-themed merchandiser Geeknet for about $122 million. But game and accessories retailer GameStop won the battle and took home the prize by bidding $140 million. To the winner go the spoils but also the 3% termination fee due to Hot Topic.

 

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HOT TOPIC, INC.

18305 San Jose Ave
City Of Industry, CA 91748-1237
Phone: 1 (626) 839-4681
www.hottopic.com

Stats

  • Employer Type: Private
  • Chair and CEO: Lisa M. Harper
  • Chair and CEO: Lisa M. Harper
  • CFO: James J. McGinty

Major Office Locations

  • City Of Industry, CA

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