McLaughlin Resigns From Hot Topic
Betsy McLaughlin, chief executive of pop-culture mall retailer Hot Topic Inc., has resigned from her job and her position as a member of the board of directors for the City of Industry, Calif.–based company.#8232; Hot Topic runs a fleet of 804 stores. The resignation, announced on March 21, was effective immediately.#8232;
Lisa Harper replaced McLaughlin as Hot Topic CEO on March 21. Harper has served on Hot Topic’s board of directors since 2008. She led The Gymboree Corp. as CEO from 2001 to 2006. McLaughlin will assist during a transition period for the next three months.#8232;
#8232;Change had been in the air for Hot Topic since March 7, when its fourth-quarter earnings were announced. However, the conference call during which quarterly results are typically discussed was postponed. The beleaguered retailer had not reported positive same-store sales since May 2009; however, it has maintained profitability and has been sluggishly improving its sales.#8232;
#8232;Instead of discussing results, the retailer announced that it had hired an outside consulting and financial-advisory firm to review company business and to recommend ways to improve revenues. The advisory firm has not been identified.#8232;
#8232;Another important change at Hot Topic occurred when two activist investors joined Hot Topic’s board of directors in October 2010. Steve Becker and Matt Drapkin are principals of Becker Drapkin Management. They control more than 5 percent of Hot Topic’s stock.#8232;
#8232;McLaughlin had served as Hot Topic’s CEO since 2000, when she succeeded the retail chain’s founder, Orv Madden, who semi-retired.#8232;
#8232;McLaughlin was known as a friendly boss who espoused what seemed like unconventional ideas. At Hot Topic headquarters, there were no walls separating top executives from other company employees. #8232;She also was responsible for launching Hot Topic’s plus size Torrid division in 2001.#8232;#8232;
Lisa Harper is considered a capable, well-regarded executive, according to Jeff Van Sinderen, an analyst with Los Angeles–based investment firm B. Riley & Co.#8232;#8232; “Many will miss Betsy,” he said. “We’ll miss her witty anecdotes. She has been at the company for such a long time. She has shaped the company in so many ways.”#8232; —Andrew Asch#8232;
