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Sunday, Sep 24, 2023

Tuesday Rundown: Hot Topic Buys Geeknet, Legion Partners Claims Victory, 99 Cents Chief Resigns

City of Industry teen retailer Hot Topic Inc. announced Tuesday that it has agreed to buy Geeknet Inc. in Fairfax, Va. for $122 million in cash and stock.

Geeknet is the parent company of online stores ThinkGeek and ThinkGeek Solutions, which specialize in apparel and accessories for what the company calls “the global geek community.” It’s the first acquisition Hot Topic has made since the company itself was acquired by private equity firm Sycamore Partners in 2013.

Items include video game-themed t-shirts, comic book figurines and Pokemon cards. Hot Topic will pay $17.50 for each share of Geeknet, whose stock more than doubled in Monday’s trading, closing at $17 a share.

Legion Victorious

Beverly Hills hedge fund Legion Partners claimed victory in a proxy battle with Miami apparel company Perry Ellis International Inc., withdrawing its slate of nominees to the company’s board and a proposal to appoint an independent chairman on Tuesday, after Perry Ellis appointed two new directors to replace longtime incumbents.

Legion, an activist investment firm that prefers to work with management and stay away from often messy proxy fights, filed a Schedule 13D form last year and issued a number of public and private communications to Perry Ellis’ management stating concerns over the company’s underperformance and in Legion’s opinion, inadequate corporate governance.

Since the filing, Perry Ellis has changed chief executives and replaced five out of seven board seats. The company’s stock is up more than 50 percent.

99 Cents Chief Resigns

Commerce bargain retailer 99 Cents Only Stores on Tuesday named an interim chief executive following the abrupt resignation Monday of the company’s now-former chief, Stephane Gonthier.

In a press release and in filings with the Securities and Exchange Commission, the company did not say why Gonthier stepped down, but said the resignation “did not involve a disagreement” with the company or its parent “or any matter relating to their respective operations, policies or practices.”

Gonthier had been chief executive for less than two years, taking the job in September 2013. He will be replaced for now by Andrew Giancamilli, chairman of the retail chain’s parent company, Number Holdings Inc.

Formerly a publicly traded company, 99 Cents Only is now owned by Century City private equity firm Ares Management and the Canada Pension Plan Investment Board. The chain operates 383 discount stores, which brought in $1.9 billion in sales in the company’s fiscal year ended Jan. 30.

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