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Organization and Basis of Presentation
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3 Months Ended |
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May 04, 2013
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| Organization and Basis of Presentation |
NOTE 1. Organization and Basis of
Presentation
Description of Business We are a mall and
web-based specialty retailer of apparel, accessories, music and
gift items for young men and women whose lifestyles reflect a
passion for music, fashion and pop culture. We primarily
operate under two concepts: Hot Topic and Torrid. We
launched a new test retail concept, Blackheart, during the fourth
quarter of fiscal 2012. Music and pop culture are the
overriding inspirations at Hot Topic, and Torrid is focused on
providing the best in fashion to young plus-size
women. At our Hot Topic stores and our website
hottopic.com, we sell a selection of licensed and non-licensed
apparel, accessories and gift items that are influenced by popular
music artists and pop culture trends, designed to appeal to young
men and women. We also sell a limited assortment of
music CDs/vinyl LPs and DVDs at Hot Topic. At our Torrid
stores and on our website torrid.com, we sell on-trend fashion
apparel, lingerie and accessories inspired by and designed to fit
the young, voluptuous woman who wears a size 12 and
up. We generate revenues primarily through our retail
stores in the United States of America, Puerto Rico and Canada, and
online through our websites. We were incorporated in
California in 1988 and opened our first Hot Topic store the
following year in fiscal 1989. We opened our first
Torrid store in fiscal 2001.
References to Hot Topic, Inc. Throughout this
report, the terms “we,” “us,”
“our,” “company” and similar references
refer to Hot Topic, Inc. and its wholly-owned
subsidiaries.
Merger On March 6, 2013, we entered into an
Agreement and Plan of Merger, or the Merger Agreement, providing
for our acquisition by an affiliate of Sycamore Partners
Management, L.L.C., or Sycamore. Under the terms of the Merger
Agreement, which was unanimously approved by our Board of
Directors, or the Board, Sycamore will acquire all of the
outstanding shares of our common stock for $14.00 per share in
cash. The transaction, which is structured as a one-step merger
with the company as the surviving corporation, or the Merger, is
subject to customary closing conditions, including receipt of
regulatory approvals and the approval of the holders of a majority
of our outstanding shares. If the Merger is approved and is
consummated, we will no longer be a publicly-traded company, and
our shares will cease to be traded on NASDAQ. We will account
for the merger by applying the acquisition method as described in
ASC 805, Business
Combinations. For more information, see our
Current Report on Form 8-K filed with the Securities and Exchange
Commission, or the SEC, on March 8, 2013.
Fiscal Year Our fiscal year ends on the Saturday
nearest to January 31. References to the first
quarter of fiscal 2013 and 2012 refer to the thirteen week periods
ended May 4, 2013 and April 28, 2012,
respectively. References to fiscal 2014 and 2013 refer
to the 52-week periods ending January 31, 2015 and February 1,
2014, respectively. References to fiscal 2012 refer to
the 53-week period ended February 2, 2013. References to
fiscal 2011 and 2010 refer to the 52-week periods ended January 28,
2012 and January 29, 2011, respectively.
Segment Information We currently have one reportable segment
given the similarities of the economic characteristics among the
Hot Topic and Torrid concepts and the relatively immaterial
business operations of our Blackheart test
concept.
Interim Financial Information The information set
forth in these condensed consolidated financial statements is
unaudited except for the February 2, 2013 consolidated balance
sheet data. These statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America for interim financial information, the
instructions to Form 10-Q, and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements. These condensed consolidated
financial statements should be read in conjunction with
the consolidated financial statements
and accompanying notes included in our Annual Report on Form 10-K
filed on March 22, 2013.
In
the opinion of management, all adjustments necessary for a fair
presentation have been included in these condensed consolidated
financial statements.
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