Hot Topic Announces 90-Store Expansion
Hot Topic, Inc. announced the company will open 90 stores by the end of 2004 during an Aug. 18 conference call on its second quarter earnings. The announcement came on the heels of disappointing comp-store sales news for this retailer based in City of Industry, Calif. Sales dropped also, by 2.1 percent.
Chief Financial Officer Jim McGinty told analysts that the poor sales during the second quarter would have little influence on the store openings. The company’s initial guidance for store openings this year was 80, and McGinty said the company would not have announced building the 10 additional stores if they had not felt confident about the expansion.
Hot Topic’s CEO, Betsy Mc- Laughlin, blamed the poor second quarter performance on the prevailing fashion trend that emphasized bright colors and feminine looks that are not the core competency of Hot Topic, which specializes in pop culture–influenced clothes.
She and McGinty told analysts that the company anticipates Halloween costumes and fashions will boost sales. They also felt the release of albums this fall by bands popular with Hot Topic customers, such as Slipknot and Flogging Molly, will boost sales for their T-shirts and accessories in their already- strong music licensing department.
—Andrew Asch
