Sycamore Partners Finalizes $600M Purchase of Hot Topic

Posted by Ryan Robinson on Jun 13, 2013

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New York based Private Equity firm Sycamore Partners has today completed their acquisition of Hot Topic as announced earlier in March.

"We are very happy to partner with Sycamore Partners. Their knowledge and expertise in the consumer and retail markets is precisely what we need to optimize both the Hot Topic and Torrid brands." - Lisa Harper, CEO Hot Topic

In March, Sycamore Partners announced their plans to acquire Hot Topic for a total of $600M. That deal closed today and both parties have expressed a strong willingness to collaboarte together on building up the successful brand.

Stefan Kaluzny, Managing Director of Sycamore Partners stated that “Sycamore Partners is very pleased to have the opportunity to partner with Lisa Harper and her team to invest in the continued development of both the Hot Topic and Torrid retail brands.”

Along with the purchase of Hot Topic came Hot Topic's newer brands Torrid and Blackheart Lingerie. Hot Topic currently operates 618 Hot Topic locations, 190 Torrid locations, and 5 Blackheart locations in all 50 US states, Puerto Rico, and Canada as well as each of their respective ecommerce websites.

Hot Topic has been publicly traded since 1996 and reached an all-time high of just over $31/share in 2004. Sycamore's purchase valued them at $14.00/share which was a 29% premium at the time of the announcement, which reflects Sycamore's positive outlook for the company. Hot Topic is now delisted from the NASDAQ. Their 2012 revenue was nearly $742M and they carried no debt moving into the acquisition. 

Sycamore Partners is a private equity firm based in New York specializing in consumer and retail investments. The firm has more than $1 billion in capital under management and their investment philosophy is to partner with management teams to improve operating profitability and strategic value of their businesses.