Is Hot Topic going out of business in 2023 – How they doing financially?

Is Hot Topic going out of business

Is Hot Topic going out of business? Hot Topic is not now at risk of going out of business. But there are certain serious difficulties the firm is currently facing that may impact its long-term survival. Hot Topic is a young adult-oriented apparel and accessory retailer. The company was started in 1988 by Orv Madden and the current CEO, Lisa Harper. They sell a wide range of products, from dresses to band t-shirts. Yet, there are also worries that Hot Topic may shut down operations.

The first warning sign came in January 2019 when the corporation let go of roughly 100 workers due to COVID-19. Around 10% of their workforce consisted of this. In February 2019, the business also closed all its locations in Canada. The only country remaining was the USA.

The moment Hot Topic said it was seeking Chapter 11 bankruptcy protection in March 2019 could have been its breaking point. This will allow them to restructure their company and come out on top. What does this mean for consumers, then? Right now, all the stores are open and conducting business as usual. Let us learn about Hot Topic in this article.

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What happened to Hot Topic?

Is Hot Topic going out of business

An American retail chain is known as Hot Topic. It specializes in licensed music and clothing with a counterculture theme. The business’s target audience is people who enjoy rock music and video games. The majority of purchasers are teenagers and young adults. Hot Topic makes about 40% of its money selling band T-shirts with official licenses.

Hot Topic negotiates exclusive licensing contracts with graphic designers, movie companies, and musicians. The majority of the shops are found in local malls. The chain was started in 1988. 605 Hot Topic stores are still open in the United States, down from a peak of 675 in 2020, as per Wikipedia.

Hot Topic may have reached its zenith in the 1990s. But the teen accessories and clothing company is still going strong. It carries products for just about every imaginable passion and obsession. Even though mall traffic in the US is dropping and vacancy rates are at an all-time high, the business has over 670 locations across the US and Canada. According to the New York Times, that is an increase from the 662 locations as of 2014. The business also maintains a dedicated internet sales channel with its 1996-born website.

There have been extensive reports of business closures since the start of the epidemic. The current online location numbers need to be more consistent. According to the company’s official LinkedIn page, there are “600+ locations,” which currently matches the number listed on MallCenters.com.

Hot Topic failures

Since its debut, the company has undergone significant expansion and change. The parent business of Hot Topic, BoxLunch, and Her Universe is currently Hot Topic, Inc. Ashley Eckstein, an actress and businesswoman, established the fangirl fashion line and lifestyle brand Her Universe in 2010. Hot Topic purchased the company in 2016. In 2015, the business opened the first BoxLunch storefronts and the BoxLunch site. After identifying a gap in the retail experiences available to adult pop culture fans and their families, it was decided to create one. 

Nothing good lasts forever. As the years went by, it became clearer that Hot Topic had forgotten the original vision that had made it successful. The emerging “geek culture” genre found a foothold in alternative communities as online culture’s hold on the mainstream faded. Hot Topic, like any sane franchise, fell in line. But GameStop would provide the franchise with its first real retail rival.

Hot Topic made a $122 million offer to buy the website ThinkGeek in June 2015. But GameStop acquired the franchise and opened its first physical location in September of the same year. The franchise restored its footing as geek culture gained popularity. It created its unique geek store, BoxLunch. But it still crumbled under pressure when Hot Topic faced real competition for the first time.

Is Hot Topic going out of business?

Hot Topic’s stagnation is most visible in the process of releasing new items and in its diminishing quality, not to mention the increase in-store prices. But this has forced the other community into thrift culture and ended the days of affordable alternative apparel. Customers have been calling for Hot Topic to return to its roots for the past few years, even starting a petition. But as of right now, the business, which is under new leadership, will continue to be a pop culture business.

The following unfavorable business difficulties relating to corporate pay were reported:

This came following a clear employee walkout over wages in November 2021. Shoppers visiting Rochester’s Apache Mall were a little shocked. They discovered that Hot Topic had closed with a short notice written on a piece of paper posted outside the store. 

According to the statement, “almost all our employees left because the Hot Topic business was unable to operate and pay a living wage.” “We are unable to feed our families and ourselves.” We are unable to continue because we have put in so much effort. Paying the employees with passion is impossible. I’m sorry for the trouble.

On social media, several people shared the message. Although it is unknown if the personnel received a pay raise, the media reports that the store reopened again. Yet, according to Comparably.com, the organization has received “D” grades in “happiness” and “compensation.” They received a “C-” for “corporate culture” from former and present employees, which is not encouraging for the organization.

Conclusion

The official closure of the company has not been declared. Yet, store closings, the popularization of geek culture, and unhappy workers must speak better for the company’s future.

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