Hot Topic to Acquire Geeknet
Hot Topic Inc. is going geek.
On May 26, the Los Angeles–based retailer announced that it had entered into an agreement to acquire Geeknet Inc., an online retailer and wholesaler of merchandise licensed from TV shows, movies and other media with science-fiction, superhero and fantasy themes. Geeknet is headquartered in Fairfax, Va.
Hot Topic, which runs more than 650 mall-based stores, said it will acquire all of the outstanding shares of Geeknet Inc. at $17.50 per share. The total equity value of the transaction is $122 million, which includes $37 million in cash and cash equivalents.
Hot Topic started business in 1988 as a place to pick up music T-shirts and band merchandise in the mall. Over the years, it has devoted increasing shop-floor space to merchandise for pop-culture fans. In 2008, Hot Topic was one of the first retailers to serve as a go-to store for merchandise from the film “Twilight.” Supporting the film franchise kicked Hot Topic out of four years of doldrums. At the end of 2008, it reported positive same-store sales after 17 quarters of negative same-store sales. Hot Topic has been a private company since 2013, when Sycamore Partners Management LLC acquired the company. The deal was valued at $600 million.
Lisa Harper, chief executive officer of Hot Topic, said Geeknet will fit in with Hot Topic, which continues a music-based business.
“Geeknet’s unique concept and approach to the online retail community is a strong fit with our business strategy, which is focused on delivering great products for avid fans of various licensed properties, and we are excited about the opportunity to help drive profitable growth and further enhance value for Geeknet’s customers,” she said in a statement.
Geeknet is a public company. In its last quarter, it reported $19 million in net revenue for the quarter compared with $22.6 million in net revenue in the same time the previous year.