Sycamore Partners to acquire Hot Topic
CITY OF INDUSTRY, Calif. — Sycamore Partners has agreed to acquire teen retailer Hot Topic for approximately $600 million, or 14 cents per share in cash. The agreement, which has been unanimously approved by Hot Topic’s board of directors, represents a premium of approximately 30% over Hot Topic’s closing stock price on March 6.
Lisa Harper, CEO and chairman of the board of Hot Topic, said, “We are pleased that this transaction will allow us to deliver positive results for our shareholders. In addition, 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.”
“We are excited to partner with the Hot Topic management team and all of its talented and passionate employees,” said Stefan Kaluzny, managing director of Sycamore Partners. “We look forward to supporting the company’s continued growth.”
The transaction, which is structured as a one-step merger with Hot Topic as the surviving corporation, is subject to customary closing conditions, including receipt of shareholder and regulatory approvals. The transaction requires the affirmative vote of holders of a majority of the Company’s outstanding shares, which will be sought at a special meeting of shareholders.
In connection with the merger agreement, Lisa Harper and Becker Drapkin Management LP, holders of 8.9% of the company’s stock, each signed customary support agreements indicating they would support the proposed transaction.
Guggenheim Securities is acting as financial advisor to Hot Topic in connection with the transaction. Cooley LLP is acting as Hot Topic’s legal advisor. BofA Merrill Lynch is acting as financial advisor to Sycamore Partners and Winston & Strawn LLP and the Law Offices of Gary M. Holihan, P.C. are acting as its legal counsel.
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Modest gains for retailers in February, led by Costco and Limited Brands
New York — Costco Wholesale Corp., Limited Brands and TJX Cos. on Thursday reported better-than-expected sales for February, as growing employment and a surging stock market apparently offset the impact of higher taxes. (Some analysts cautioned, however, that the monthly figures have become less influential as an economic indicator as the number of retailers reporting on a monthly basis has dropped considerable. As of this month, Target and Kohl’s are no longer reporting monthly sales.)
Overall, 15 retailers reported on Thursday that same-store sales rose 1.7%, according to the International Council of Shopping Centers.
Costco posted a 6% rise in same-store sales, helped by higher gasoline prices and strong sales of fresh food and consumer electronics. Wall Street analysts were expecting a 5.1% increase.
At Limited Brands reported a 3% increase in same-store sales, ahead of the 2.6% predicted increase. The metric rose 5% at Victoria’s Secret stores and was unchanged at Bath & Body Works. It rose 5% at La Senza, Limited’s Canadian lingerie store chain.
TJX Cos. Said that its February same-store sales rose 1%, topping Wall Street expectations of a 0.4% rise. CEO Carol Meyrowitz said that strong sales toward the end of the month helped the company achieve its better-than-expected same-store revenue. The European businesses also continued to show strength.
But some retailers disappointed in February.
Ross Stores Inc. that its February same-store sales fell 1%, missing the 1.1% increase analysts had forecast.
"We believe the slight decline in February same store sales was mainly due to the delay in income tax refunds," said CEO Michael Balmuth. "With sales improving as the month progressed, we continue to forecast same store sales in March and April to be down 1% to 2% and up 5% to 6%, respectively."
Teen fave Zumiez Inc. said that its same-store sales dropped 8.9% in February. Wall Street expected a 1.9 % decline.
In other February same-store sales results:
- The Buckle reported a drop of 1.1%, and
- Stein Mart reported an increase of 0.6%.
‘Project Runway’ contestants to make high-fashion styles with Duck Tape
AVON, Ohio — Duck Tape is heading to the runway this Thursday on Lifetime’s “Project Runway,” as season 11’s aspiring designers face the “Unconventional Materials Challenge,” a competition in every season that challenges them to create high-fashion clothing from something other than fabric.
Airing on March 7 at 9 p.m. EST/8 p.m. CDT, the episode will feature contestants trying to win over the judges — Heidi Klum, Nina Garcia and Zac Posen — with their designs made with Duck Tape-brand duct tape. Designers will team up and create their styles from Duck Tape’s wide range of more than 150 colors — which include aqua, fluorescent green, pink, orange and yellow — and prints, such as Mustache, Graffiti and Zig-Zag.
Thanks to the product’s versatility and the endless number of ways it can be used, Duck Tape has backed a trend of using duct tape for aesthetic purposes in addition to practical ones.
“Duck Tape has come a long way in the crafting and fashion world,” said Bill Kahl, EVP marketing at ShurTech Brands, the company that markets Duck Tape. “It has become a remarkable design medium, with countless Duck Tape enthusiasts using it to create everything from handbags to headbands, and we continue to see this trend grow as our palette of colors and prints evolves. This is a great partnership, and we’re anxious to see the final creations.”
Duck Tape is available at mass merchandise, craft, hardware, home center, food, drug, office, auto and specialty retailers nationwide. To see the latest duct tape creations, or share your own, visit DuckBrand.com. For all the latest Duck Tape news, follow the brand’s Facebook page, Facebook.com/DuckTape; follow its Twitter handle, @theduckbrand; follow its Pinterest boards, Pinterest.com/TheDuckBrand; or tune in to its YouTube channel, YouTube.com/TheDuckBrand.
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