Business Breaking News

The Canadian Press - ONLINE EDITION

Teen retailer Hot Topic selling itself to investment firm Sycamore for about $592 million

By: The Associated Press

Thursday, Mar. 7, 2013 at 9:07 AM | Comments: 0

Casey Partlow of Gahanna, shops for T-shirts at Hot Topic, a teen clothing store, June 21, 2004. THE CANADIAN PRESS/AP,Jay LaPrete

CITY OF INDUSTRY, Calif. - Hot Topic said Thursday it agreed to be acquired by investment firm Sycamore Partners for about $592.4 million in cash.

Shares shot up 29 per cent, hitting a six-year high, in morning trading.

Sycamore is paying $14 per share for the teen retailers, 30 per cent above the City of Industry, Calif., company's closing stock price Wednesday.

Hot Topic's shareholders still have to approve the deal. All of Hot Topic's directors voted for it.

"We are very excited about the future growth for the company and know that Sycamore Partners will provide great resources and expertise to us as we operate as a private company," said CEO Lisa Harper.

Becker Drapkin Management, an investment firm and Hot Topic's largest shareholder with 8.4 per cent of shares, also supports the deal.

Hot Topic Inc. runs its namesake stores as well as the Torrid chain, a plus-size brand. It's also testing a new store, Blackheart, which offers beauty products, lingerie and accessories. The company has about 800 stores in North America.

Hot Topic carved out a niche for itself selling music t-shirts and Twilight clothing and accessories. After taking a hit from the recession, it began closing unprofitable stores, changing its product lineup and shuttering its music download and social networking website. Sales started rising again last year after a long slump, and analysts expect a profit for the year that ended in January after two straight annual losses.

Hot Topic reports its results for its fiscal fourth quarter and year next week.

Shares rose $3.13 to $13.88 during morning trading, peaking earlier Thursday at $13.95, the highest price since January 2007. The stock had been up about 7 per cent over the past 12 months through Wednesday's close.

Rate this
This article has not yet been rated.

We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

You can also register and/or login to the site and join the conversation by leaving a comment.

Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Comments

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Comment

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.