Thumbnail image from famed street artist Zevs.
The first official day of Spring, March 21, 2011 brought with it some interesting news from youth culture retailers and brands. First, Hot Topic announced that their CEO, Betsy McLaughlin had resigned and that Lisa Harper, a member of the board, is now CEO. A conference call to discuss the transition and implications from fourth quarter results is scheduled for March 28, 2011.
This news comes after their 4th quarter news earlier this month of a net loss of $0.6 million compared with last year, and an overall 2010 net loss of $8.2 million. Total comparable store sales declined 2.1% for the fourth quarter.
They also announced that they had brought in an outside consulting and financial advisory firm to review the company’s business and operations for future improvements. Currently, Hot Topic has 657 Hot Topics stores, and 153 Torrid stores.
Interestingly, in Label Networks’ Spring Youth Culture Study 2011, we reveal changes in youth culture preferences among 13-25-year-olds for Hot Topic as a brand and retailer. The results indicate why youth culture shops there and their various changes in preferences that represent fresh opportunities, not only for Hot Topic, but many other youth culture retailers.
Nike ‘s shares took a blow on Friday, dropping 9% when they announced tough times ahead as their margins were getting squeezed due to increased costs for production, including cotton prices and costs of freight. It was their biggest decline in more than 2 years, after they warned that such cost pressures will continue well into 2012, and they would not be able to hike up prices in time (too big to change quickly) to offset these costs.
Of course, this is good news for youth culture buying Nike products, but we can expect price increases, it sounds like, starting as soon as they can start the process around late 2012 and 2013. This also affects their other brands such as Converse and Hurley.
Just released in Label Networks’ Spring Youth Culture Study 2011, we have seen some significant changes in Nike preferences among the youth marketplace, but particularly for Hurley. Compared with other youth brands such as Volcom, Vans, American Eagle, Abercrombie & Fitch, among others, Hurley’s results were the most unique in terms of youth preferences and Hurley’s strategies targeting the marketplace. Let’s just say there may be a disconnect happening.
Nike accounts for most of its business, 34% from the U.S., but is making significant moves throughout China as usual.
Nike’s total revenue grew 7% to $5,079 million from $4,733 million the year before for the fourth quarter.