UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 23, 2025, Torrid Holdings Inc. (the “Company”) entered into an agreement (“Stock Repurchase Agreement”) with Sycamore Partners Torrid, L.L.C. (the “Seller”) to purchase $20 million of shares of the Company’s common stock (the “Common Stock”) from the Seller in a private transaction at a price per share equal to the per share price at which the underwriters of the Offering (as defined below) will purchase the shares of Common Stock in the Offering (the “Concurrent Repurchase”). The Concurrent Repurchase was approved by Company’s board of directors acting on the recommendation of the audit committee. The repurchased shares will be held as treasury stock upon completion of the Concurrent Repurchase. The Concurrent Repurchase is expected to be consummated substantially concurrently with the closing of the Offering. The Offering is not conditioned upon the closing of the Concurrent Repurchase, but the Concurrent Repurchase is conditioned upon the closing of the Offering.
The foregoing description of the Stock Repurchase Agreement does not purport to be complete and is subject to and is qualified in its entirety by reference to the Stock Repurchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and the terms of which is incorporated herein by reference. For more information on the Seller’s relationship to the Company, please refer to the Company’s Definitive Proxy Statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 23, 2025.
| Item 7.01 | Regulation FD Disclosure. |
On June 24, 2025, the Company filed a preliminary prospectus supplement (the “Preliminary Prospectus Supplement”) to its effective shelf registration statement on Form S-3 (No. 333-277148) pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), relating to an underwritten public offering (the “Offering”) of shares of Common Stock by certain stockholders of the Company listed in the Preliminary Prospectus Supplement. The Preliminary Prospectus Supplement contains certain information relating to the Company’s business strategy and operations, which is furnished in an excerpt from the Preliminary Prospectus Supplement and attached hereto as Exhibit 99.1.
A copy of the Company’s press release announcing the launch of the Offering and the Concurrent Repurchase is included herewith as Exhibit 99.2 and is incorporated by reference.
This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations, or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act.
The information provided pursuant to this Item 7.01, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in any such filing.
Forward-Looking Statements
Certain statements made in this Current Report on Form 8-K are “forward looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act and are subject to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2) are forward-looking statements. Forward-looking statements reflect our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. When used in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2), the words “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology) are
intended to identify forward-looking statements. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements, including: changes in consumer spending and general economic conditions; the interruption of the flow of merchandise from international manufacturers, including as a result of the imposition of additional duties, tariffs and other charges on imports and exports; the negative impact on interest expense as a result of high interest rates; inflationary pressures with respect to labor and raw materials and global supply chain constraints that could increase our expenses; the adverse impact of rulemaking changes implemented by the Consumer Financial Protection Bureau on our income streams, profitability and results of operations; our ability to identify and respond to new and changing product trends, customer preferences and other related factors; our dependence on a strong brand image; increased competition from other brands and retailers; our reliance on third parties to drive traffic to our website; the success of the shopping centers in which our stores are located; our ability to adapt to consumer shopping preferences and develop and maintain a relevant and reliable omni-channel experience for our customers; our dependence upon independent third parties for the manufacture of all of our merchandise; availability constraints and price volatility in the raw materials used to manufacture our products; our sourcing a significant amount of our products from China; shortages of inventory, delayed shipments to our e-commerce customers and harm to our reputation due to difficulties or shut-down of our distribution facility; our reliance upon independent third-party transportation providers for substantially all of our product shipments; our growth strategy; our failure to attract and retain employees that reflect our brand image, embody our culture and possess the appropriate skill set; damage to our reputation arising from our use of social media, email and text messages; our reliance on third parties for the provision of certain services, including real estate management; our dependence upon key members of our executive management team; our reliance on information systems; system security risk issues that could disrupt our internal operations or information technology services; unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system, third-party computer systems we rely on, or otherwise; our failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection; payment-related risks that could increase our operating costs or subject us to potential liability; claims made against us resulting in litigation; changes in laws and regulations applicable to our business; regulatory actions or recalls arising from issues with product safety; our inability to protect our trademarks or other intellectual property rights; our substantial indebtedness and lease obligations; restrictions imposed by our indebtedness on our current and future operations; changes in tax laws or regulations or in our operations that may impact our effective tax rate; the possibility that we may recognize impairments of definite-lived assets; our failure to maintain adequate internal control over financial reporting; and the threat of war, terrorism or other catastrophes, including natural disasters, that could negatively impact our business.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the effect of known factors and it is impossible for us to anticipate all factors that could affect our actual results. We caution you that the important factors referenced above may not contain all of the factors that are important to you. The outcome of the events described in any of our forward-looking statements are also subject to risks, uncertainties and other factors described in our filings with the SEC, including the section entitled “Risk Factors” of the Prospectus Supplement, Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025, and Item 1A. “Risk Factors” and Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Quarterly Report on Form 10-Q for the quarter ended May 3, 2025, and elsewhere in this communication. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements as well as other cautionary statements that are made from time to time in our other filings with the SEC and public communications. You should evaluate all forward-looking statements included or incorporated by reference in this Current Report on Form 8-K in the context of these risks and uncertainties.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. |
Description | |
| 10.1 | Stock Repurchase Agreement, dated June 23, 2025, by and between Torrid Holdings Inc. and Sycamore Partners Torrid, L.L.C. | |
| 99.1 | Excerpt from Preliminary Prospectus Supplement | |
| 99.2 | Press Release of Torrid Holdings Inc., dated June 24, 2025. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TORRID HOLDINGS INC. | ||
| By: | /s/ Bridgett C. Zeterberg | |
| Name: | Bridgett C. Zeterberg | |
| Title: | Chief Human Resources Officer, Chief Legal Officer and Corporate Secretary | |
Date: June 24, 2025
Exhibit 10.1
STOCK REPURCHASE AGREEMENT
THIS STOCK REPURCHASE AGREEMENT (this “Agreement”) is made as of June 23, 2025 by and among Torrid Holdings Inc., a Delaware corporation (the “Company”), and Sycamore Partners Torrid, L.L.C., a Delaware limited liability company (the “Seller”). Each of the Company and the Seller shall be a “Party” and together, “Parties” for purposes of this Agreement.
WHEREAS, the Seller holds 73,976,602 shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (the “Common Stock”);
WHEREAS, the Seller, the Company and each of BofA Securities, Inc., Goldman Sachs & Co. LLC, Jefferies LLC and William Blair & Company, L.L.C., as representatives of the several underwriters party thereto (the “Underwriters”), intend to enter into an Underwriting Agreement with respect to an underwritten offering (the “Offering”) by the Seller of certain shares of Common Stock;
WHEREAS, the Seller desires to sell, and the Company desires to repurchase, contingent on the closing of the Offering, a certain number of Shares (the “Seller Shares”), for an aggregate amount of $20 million, on the terms and subject to the conditions contained in this Agreement (the “Stock Repurchase”);
WHEREAS, the Seller Shares will be held as treasury shares by the Company upon the consummation of the Stock Repurchase, subject to the terms and conditions set forth herein;
WHEREAS, the Audit Committee of the board of directors of the Company (the “Board”) has approved the Stock Repurchase and related transactions that may be required in connection with the Stock Repurchase;
WHEREAS, the Board acting on the recommendation of the Audit Committee has approved the Stock Repurchase; and
WHEREAS, it is the intention of the Parties that the Stock Repurchase be a private sale of securities that is exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended.
NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Purchase and Sale of Stock.
1.1 Sale of Shares. Subject to the terms and conditions of this Agreement, the Seller agrees to sell to the Company, and the Company agrees to purchase, on the Closing Date (as defined below) the Seller Shares at a price per share equal to the Share Purchase Price (as defined below) for an aggregate amount of $20 million (the “Aggregate Repurchase Price”). As used herein, the parties hereto acknowledge that the “Share Purchase Price” shall equal the per share purchase price to be paid by the Underwriters in the Offering (which, for the avoidance of doubt, will be equal to the per share proceeds, before expenses, to the selling securityholders as reflected on the cover of the final prospectus supplement for the Offering).
1.2 Closing Date. The purchase and sale of the Seller Shares shall take place remotely via the electronic exchange of documents and signatures on the date of the closing of the Offering or at such other time and date as the Company and the Seller shall mutually agree (which time and place are designated as the “Closing Date”). At the Closing Date: (i) the Company shall pay to the Seller in cash the Aggregate Repurchase Price by wire transfer of immediately available funds to an account that the Seller shall designate in writing and (ii) the Seller and the Company shall deliver, or cause to be delivered, to the Company’s transfer agent a duly executed instruction letter relating to the transfer of the Seller Shares to an account designated by the Company.
2. Representations and Warranties of the Seller. The Seller hereby represents and warrants that:
2.1 Ownership of Shares. Upon the purchase and sale of the Seller Shares on the Closing Date in accordance with Section 1.2 hereof, the Seller shall: (i) own all right, title and interest (legal and beneficial) in and to all of the Seller Shares, free and clear of all liens, including, but not limited to, any lien, pledge, claim, security interest, encumbrance, mortgage, assessment, charge, restriction or limitation of any kind, whether arising by agreement, operation of law or otherwise, except for those imposed by applicable federal and state securities laws; (ii) have good and marketable title to the Seller Shares and (iii) have the full power and authority to sell, transfer, convey, assign and deliver to the Company the Seller Shares being sold by Seller to the Company, and upon payment for the Seller Shares, the Company shall acquire valid and unencumbered title to the Seller Shares.
2.2 Authorization; Approval; Enforceability. The Seller has full power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly executed and delivered by the Seller and constitutes the valid and legally binding obligation of the Seller, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
2.3 Consents. To the knowledge of the Seller, no consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any person or entity is required on the part of the Seller in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby (other than consents obtained on or before the Closing Date).
2.4 No Conflicts. To the knowledge of the Seller, neither the execution and delivery of this Agreement nor compliance with the terms and provisions hereof on the part of the Seller will breach any statutes or regulations of any governmental authority, domestic or foreign, or will conflict with or result in a breach of the Seller’s organizational documents or of any of the terms, conditions or provisions of any judgment, order, injunction, decree, agreement
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or instrument to which the Seller is a party or by which the Seller or its assets may be bound, or constitute a default thereunder or an event which with the giving of notice or passage of time or both would constitute a default thereunder, which, in each of the foregoing cases, would have any material adverse impact on the Seller’s ability to perform its obligations hereunder.
2.5 Litigation. There is no action, suit, proceeding or investigation pending or, to the Seller’s knowledge, currently threatened that questions the validity of this Agreement, or the right of the Seller to enter into this Agreement, or to consummate the transactions contemplated hereby.
2.6 Sophistication of the Seller. The Seller (i) is a sophisticated investor familiar with transactions similar to those contemplated by this Agreement, (ii) has adequate information concerning the business and financial condition of the Company to make an informed decision regarding the sale of the Seller Shares, (iii) has independently and without reliance upon the Company or any of its officers, directors or other affiliates, and based on such information and the advice of such advisors as the Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement. The Seller acknowledges that neither the Company nor any of its affiliates is acting as a fiduciary or financial or investment adviser to the Seller, and has not given the Seller any investment advice, opinion or other information on whether the sale of the Seller Shares is prudent. The Seller acknowledges that (x) the Company currently may have, and later may come into possession of, information with respect to the Company that is not known to the Seller and that may be material to a decision to sell the Seller Shares (the “Excluded Information”), (y) the Seller has determined to sell the Seller Shares notwithstanding its lack of knowledge of the Excluded Information and (z) the Company shall have no liability to the Seller, and the Seller waives and releases any claims that it might have against the Company whether under applicable securities laws or otherwise, with respect to the nondisclosure of the Excluded Information in connection with the sale of the Seller Shares and the transactions contemplated by this Agreement. The Seller understands that the Company will rely on the accuracy and truth of the foregoing representations, and the Seller hereby consents to such reliance. The Seller has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to the Stock Repurchase.
2.7 Consideration. The transactions contemplated by this Agreement provide good, valuable, and sufficient consideration for every promise, duty, agreement, obligation, and right contained in this Agreement.
3. Representations and Warranties of the Company. The Company hereby represents and warrants that:
3.1 Authorization; Approval; Enforceability. The Company has full power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly executed and delivered by the Company and constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
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3.2 No Consent. To the knowledge of the Company, no consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any person or entity is required on the part of the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby (other than consents obtained on or before the Closing Date).
3.3 No Conflicts. To the knowledge of the Company, neither the execution and delivery of this Agreement nor compliance with the terms and provisions hereof on the part of Company will breach any statutes or regulations of any governmental authority, domestic or foreign, or will conflict with or result in a breach of the Company’s organizational documents or of any of the terms, conditions or provisions of any judgment, order, injunction, decree, agreement or instrument to which the Company is a party or by which the Company or its assets may be bound, or constitute a default thereunder or an event which with the giving of notice or passage of time or both would constitute a default thereunder, which, in each of the foregoing cases, would have any material adverse impact on the Company’s ability to perform its obligations hereunder.
3.4 Litigation. There is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened that questions the validity of this Agreement, or the right of the Company to enter into this Agreement, or to consummate the transactions contemplated hereby.
3.5 Consideration. The transactions contemplated by this Agreement provide good, valuable, and sufficient consideration for every promise, duty, agreement, obligation, and right contained in this Agreement.
4. Conditions of the Obligations of the Seller and the Company. The obligations of the Seller to deliver the Common Stock and of the Company to purchase and pay for the Common Stock, in each case as provided herein, shall be subject to the prior or substantially concurrent closing of the Offering.
If the conditions specified in this Section 4 are not satisfied by June 27, 2025, this Agreement shall automatically terminate without liability on the part of any party to any other party, except that Sections 5.3, 5.4, 5.5, 5.12, 5.13 and 5.15 shall at all times be effective and shall survive such termination.
5. Miscellaneous.
5.1 Seller’s Tax Obligations. The Seller shall be solely responsible for paying any and all taxes and any tax related penalties, fines and interest related to sale of the Seller Shares pursuant to this Agreement that the Seller is responsible for under the law.
5.2 Indemnification. Each Party (the “Indemnifying Party”) shall indemnify, defend and hold harmless the other Party and its affiliates and their respective representatives (the “Indemnified Party”) from and against any and all costs, expenses (including reasonable attorney’s fees), judgements, fines and losses incurred or sustained by, or imposed upon the Indemnified Party based upon, arising out of, with respect to or by reason of: (i) any inaccuracy in or breach of any of the representations or warranties of the Indemnifying Party contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Indemnifying Party pursuant to this Agreement; and (ii) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Indemnifying Party pursuant to this Agreement.
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5.3 Successors and Assigns; Third Party Beneficiaries. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.
5.4 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws.
5.5 Submission to Jurisdiction. Each of the Parties hereto (a) irrevocably and unconditionally consents to submit itself to the sole and exclusive personal jurisdiction of the Court of Chancery of the State of Delaware, or, if that court does not have jurisdiction, the Superior Court of the State of Delaware, or, if the subject matter of the action is one over which exclusive jurisdiction is vested in the courts of the United States of America, a federal court sitting in the State of Delaware (collectively, the “Delaware Courts”) in connection with any dispute, claim, or controversy arising out of or relating to this Agreement or the transactions contemplated hereby, (b) waives any objection to the laying of venue of any such litigation in any of the Delaware Courts, (c) agrees not to plead or claim in any such court that such litigation brought therein has been brought in an inconvenient forum and agrees not otherwise to attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (d) agrees that it will not bring any action in connection with any dispute, claim, or controversy arising out of or relating to this Agreement or the transactions contemplated hereby, in any court or other tribunal, other than any of the Delaware Courts. All actions arising out of or relating to this Agreement or the transactions contemplated hereby shall be heard and determined in the Delaware Courts. Each of the Parties hereto hereby irrevocably and unconditionally agrees that service of process in connection with any dispute, claim, or controversy arising out of or relating to this Agreement or the transactions contemplated hereby may be made upon such Party by prepaid certified or registered mail, with a validated proof of mailing receipt constituting evidence of valid service, directed to such Party at the address specified in Section 5.15 hereof. Service made in such manner, to the fullest extent permitted by applicable law, shall have the same legal force and effect as if served upon such Party personally within the State of Delaware. Nothing herein shall be deemed to limit or prohibit service of process by any other manner as may be permitted by applicable law.
5.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Electronically executed and/or transmitted signature pages shall be accepted as originals for all purposes hereof.
5.7 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
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5.8 Finder’s Fee. Each Party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with the Stock Repurchase. Each Party also represents that it has not entered into any agreements for which such Party would be liable for finder’s fees or commissions in connection with this transaction or any other contemplated transaction. Each Party agrees to indemnify and hold harmless the other Party from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which such Party or any of its directors, stockholders, employees or representatives is responsible.
5.9 Amendment and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company and the Seller. Any waiver by any Party hereto of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party hereto to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
5.10 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
5.11 Survival of Representations and Warranties. The representations, warranties and covenants made by the Seller and the Company shall survive the Closing Date. Notwithstanding any knowledge of facts determined or determinable by any Party by investigation, each Party shall have the right to fully rely on the representations, warranties and covenants of the other Party contained in this Agreement or in any other documents or papers delivered in connection herewith. Each representation, warranty and covenant of the Parties contained in this Agreement is independent of each other representation, warranty and covenant. Except as expressly set forth in this Agreement, no Party has made any representation, warranty or covenant.
5.12 Entire Agreement. This Agreement constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings related to such subject matter.
5.13 Expenses. Irrespective of whether the Closing Date is effected, each of the Company and the Seller shall pay all costs and expenses that such Party incurs with respect to the negotiation, execution, delivery and performance of this Agreement and the transactions thereby contemplated (it being understood, for the avoidance of doubt, that the Seller shall bear all underwriting discounts and commissions in respect of the Offering, as well as any transfer taxes. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
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5.14 Further Assurances. Upon the terms and subject to the conditions of this Agreement, each of the Parties hereto agrees to execute such additional documents, to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate or make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.
5.15 Notices. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered (a) three (3) business days after being sent by registered or certified mail, return receipt requested, postage prepaid or (b) one (1) business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below:
If to the Company, at the address set forth below, or at such other address as may have been furnished in writing by the Company to the other parties hereto.
Torrid Holdings Inc.
18501 E. San Jose Ave.
City of Industry, California 91748
Attention: Paula Dempsey
with a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Facsimile: (212) 446-4900
Attention: Joshua N. Korff P.C.; Michael Kim P.C. ; Asher A. Qazi
If to the Seller, at the address set forth below, or at such other address as may have been furnished in writing by the Seller to the other parties hereto.
Sycamore Partners Management, L.P.
9 West 57th Street, 31st Floor
New York, New York 10019
Attention: Stefan Kaluzny
with a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Facsimile: (212) 446-4900
Attention: Joshua N. Korff P.C.; Michael Kim P.C. ; Asher A. Qazi
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Any Party may give any notice, request, consent or other communication under this Agreement using any other means (including, without limitation, personal delivery, messenger service, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the Party for whom it is intended. Any Party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 5.15.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
| THE COMPANY: | ||
| TORRID HOLDINGS INC. | ||
| By: | /s/ Bridgett C. Zeterberg | |
| Name: | Bridgett C. Zeterberg | |
| Title: Chief Human Resources Officer, Chief Legal Officer and Corporate Secretary | ||
[Signature Page to Stock Repurchase Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
| THE SELLER: | ||
| SYCAMORE PARTNERS TORRID, L.L.C. | ||
| By: |
Sycamore Partners GP, L.L.C. | |
| Its: |
Managing Member | |
| By: |
Sycamore Partners MM, L.L.C. | |
| Its: |
Managing Member | |
| By: | /s/ Stefan Kaluzny | |
| Name: |
Stefan Kaluzny | |
| Title: |
Managing Member | |
[Signature Page to Stock Repurchase Agreement]
Exhibit 99.1
Our Company
We are a direct-to-consumer brand in North America dedicated to offering a diverse assortment of stylish apparel, intimates, and accessories skillfully designed for the curvy woman. Specializing in sizes 10 to 30, our primary focus is on providing fashionable, comfortable, and affordable options that meet the unique needs of our customers. Our extensive collection features high quality merchandise, including tops, bottoms, denim, dresses, intimates, activewear, footwear, and accessories. Our products are exclusive to us and each product is meticulously crafted to cater to the needs of the curvy woman, empowering her to love the way she looks and feels. Our collections are artfully curated to suit all aspects of our customers’ lives, including casual weekends, work, dressy and special occasions. Understanding the importance of affordability, we aim to keep our prices reasonable without compromising on quality. This allows us to build a meaningful connection with our customers, distinguishing us from other brands that often overlook plus- and mid-size consumers. Our brand experience and product offerings establish us as a differentiated and reliable choice for plus- and mid-size customers, which we believe sets us apart in the market. We strive to be everything our customer needs in her closet, consistently delivering products that make her feel confident and stylish.
We employ a digitally-led, omni-channel strategy, allowing our customer to experience our brand wherever and whenever she wants. We market directly to consumers via our e-Commerce platform and our physical footprint of 632 stores as of May 3, 2025. E-Commerce penetration represented 61% of net sales in fiscal year 2024, while digital demand increased from 60% in fiscal year 2023 to approximately 70% in fiscal year 2024. Our broad digital ecosystem-from our engaging e-Commerce website to our user-friendly mobile app-allows us to better connect, engage, track, and service customers. Our customers’ satisfaction with our omni-channel experience, as well as the product fit, quality, and affordability of our brand, is reflected in our industry-leading average NPS score of 85 from February 2024 to February 2025, as compared to the industry average in the low 40s based on industry data from 2023, and a return rate of approximately 10% in fiscal year 2024, versus the industry average of approximately 25%. In addition, customers who were members of our loyalty program accounted for 96% of net sales in the three months ended May 3, 2025.
Our broad digital ecosystem also provides robust quantitative and qualitative customer data that we use to inform all aspects of our operations, from product development to merchandising and marketing. Our stores are designed to create an inclusive and welcoming environment where our customers can discover and engage with our brand, experience our product and connect with a community of like-minded women. Our stores also serve as an effective and profitable source of new customer acquisition and conversion, and the integration of our e-Commerce platform and our stores is fundamental to our customer-centric strategy as those two channels complement and drive traffic to one another.
Product Development
We have enhanced our product development capabilities, shifting our design strategy away from a strict, rules-based approach to better emphasize product relevancy, including design, color, and print, which better reflect current fashion trends and how our customer shops.
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In the fourth quarter of fiscal year 2024 we introduced a portfolio of sub-brands that are designed for distinctive lifestyles and allow us to target a broader range of customers. These sub-brands elevate and enhance our core Torrid brand offering by delivering our customers consistent newness and product innovation across the portfolio. We intend to introduce at least several new sub-brands in 2025. We estimate that sub-brands will represent nearly 10% of net sales for fiscal year 2025, and we are targeting an increase to 30% of net sales by the end of fiscal year 2026. We believe our sub-brand strategy will deliver sustainable, profitable growth, while improving the frequency and depth of our engagement with our customers. Sub-brands have attracted a younger customer with higher household income, while also increasing long-term customer value, shopping frequency and participation with our brand. For instance, we estimate that 90% of customers who purchased sub-brands added our core Torrid product to their baskets, while on average, sub-brand customers have demonstrated greater shopping frequency and higher levels of spend.
Additionally, we have improved our sourcing capabilities and infrastructure, consolidating our vendor base and diversifying country of origin while shortening our product development cycle by approximately three weeks and increasing efficiencies in product cost, which we believe allows us to provide our customer more frequent newness and react quickly to new fashion trends. Importantly, we have also reduced our exposure to product sourced from China, and expect our China production to represent only a low-to-mid single-digit percentage of our total sourcing receipts by the end of fiscal year 2025.
Inventory Management
We have undertaken a significant effort to realign our commercial planning and inventory management processes to support the increasing scale and complexity of our business. In addition to adopting a series of planning and inventory best practices, we have implemented dedicated merchandising, financial and assortment planning systems, which allow us to plan and manage our inventory with greater precision and financial discipline. As of February 1, 2025, we successfully reduced inventory by approximately 18% from its peak in fiscal year 2022, enabling us to improve our working capital efficiency and allowing us to reinstate our ability to chase high turning and popular product inventory.
Retail Optimization Strategy
We have implemented a retail store optimization strategy to better align our distribution with the demands of our customers who have increasingly demonstrated a preference for our online experience. We believe this strategy will enhance our customer experience, significantly reduce our cost structure, and improve working capital and cash flow generation, allowing us to reinvest more aggressively in customer reactivation and acquisition initiatives to support long-term revenue growth.
We plan to close approximately 60 stores by the end of the second quarter of fiscal year 2025 and intend to accelerate our store closures throughout the remainder of fiscal year 2025 to target as many as 120 additional store closures. Approximately 60% of our store leases are up for renewal in fiscal year 2025, allowing us to execute these store closures with limited cash outlays. The 120 additional stores we have identified for closure average approximately $350,000 in annual sales, which is lower than our fleet average, and are primarily located in what we believe are less attractive locations and regions. As a result of these closures, we intend to exit only approximately 3% of our current markets.
We believe we will benefit from Adjusted EBITDA Margin expansion in fiscal year 2026 and beyond, which we anticipate will support sustainable growth at structurally higher levels of profitability. Historically, we have retained approximately 60% of net sales generated from closed stores and we intend to make targeted marketing investments to support sales retention. Additionally, the store closures are expected to also increase the penetration of off-mall locations to approximately 45% of our store fleet. Our off-mall locations typically deliver stronger productivity and higher levels of profitability.
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Marketing
We continue to evolve our marketing investments to better engage with our customer and provide her with a differentiated experience with our brand. Importantly, we have invested behind balanced, digitally-led marketing initiatives that are increasingly focused on brand awareness, new customer growth, and reactivation, while also utilizing our national store base to further improve customer engagement with our brand. We continue to leverage the reach of our loyalty program, as well as social media and influencer driven strategies to build authentic connectivity with our customers across multiple consumer segments and demographics. These selected marketing initiatives, in addition to others, have allowed us to deliver a 78% net sales retention rate in 2024 and 52% brand awareness based on a third-party market survey conduced in 2024. Additionally, we have experienced low-double-digit percentage growth in our online customer reactivations as well as mid-single-digit percentage growth in our new online customer file, during the last twelve months ended May 3, 2025.
BASIS OF PRESENTATION
Our fiscal year ends on the Saturday nearest to January 31 and each fiscal year is generally comprised of four 13-week quarters (although in years with 53 weeks, the fourth quarter is comprised of 14 weeks). Fiscal years 2024 and 2022 were 52-week years and fiscal year 2023 was a 53-week year. Fiscal years are identified in this prospectus supplement according to the calendar year in which they begin. For example, references to “fiscal year 2024” or similar references refer to the fiscal year ended February 1, 2025. References to the first quarter of fiscal year 2025 and to the three-month period ended May 3, 2025 refer to the 13-week period then ended.
As used in this prospectus supplement:
| • | “customer cohort” means all of our customers who made their initial purchase in a given year, across all channels; |
| • | “digital demand” represents the volume of committed orders generated in the e-Commerce channel, including orders generated from our website, mobile app, and through the buy-online-pickup-in-store and ship from store offerings, that are pending fulfillment. As is common for online retailers, a portion of these orders do not convert to online sales due to out-of-stock merchandise, payment processing issues, and other normal factors that result in the eventual cancelation of the orders; |
| • | “e-Commerce penetration” means net sales generated in the e-Commerce channel, including sales generated from our website, mobile app, and through the buy-online-pickup-in-store and ship from store offerings, divided by total net sales; |
| • | “Net Promoter Score,” or “NPS,” is a commonly used metric to measure consumer satisfaction and loyalty and indicates the percentage of consumers rating their likelihood to recommend a product or service to a friend. The percentage of “detractors,” or consumers who respond with a rating of 6 or less, is subtracted from the percentage of “promoters,” or consumers who respond with a 9 or 10, to yield NPS. We have calculated NPS for us and a set of 27 peers based on a survey of plus-size consumers we commissioned, using the same methodology for all companies. For purposes of the NPS, we define “industry average” NPS as the average NPS of us and the 27 peers, which include select department stores, mass-retailers, specialty retailers and direct to consumer brands; and |
| • | “net sales retention rate” means net sales attributable to the prior year’s identifiable customer cohorts, divided by the prior year’s total net sales attributable to identifiable customer cohorts. |
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBTIDA margin are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP and our calculations thereof may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA represents GAAP net income (loss) plus interest expense less interest income, net of other expense (income), plus provision for (benefit from) income taxes, depreciation and amortization (“EBITDA”), and share-based compensation, non-cash deductions and charges, and other expenses. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of our total net sales. We believe Adjusted EBITDA and
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Adjusted EBTIDA margin facilitate operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to ongoing operating performance. We also use Adjusted EBITDA and Adjusted EBITDA margin as two of the primary methods for planning and forecasting the overall expected performance of our business and for evaluating on a quarterly and annual basis, actual results against such expectations. Further, we recognize Adjusted EBITDA and Adjusted EBITDA margin as commonly used measures in determining business value and, as such, use it internally to report and analyze our results and we additionally use Adjusted EBITDA as a benchmark to determine certain non-equity incentive payments made to executives. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools. These measures are not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to or substitute for net income (loss), income (loss) from operations, earnings (loss) per share or any other performance measures determined in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Forward-Looking Statements
Certain statements herein are “forward looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act and are subject to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included herein are forward-looking statements. Forward-looking statements reflect our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. When used herein, the words “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology) are intended to identify forward-looking statements. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements, including: changes in consumer spending and general economic conditions; the interruption of the flow of merchandise from international manufacturers, including as a result of the imposition of additional duties, tariffs and other charges on imports and exports; the negative impact on interest expense as a result of high interest rates; inflationary pressures with respect to labor and raw materials and global supply chain constraints that could increase our expenses; the adverse impact of rulemaking changes implemented by the Consumer Financial Protection Bureau on our income streams, profitability and results of operations; our ability to identify and respond to new and changing product trends, customer preferences and other related factors; our dependence on a strong brand image; increased competition from other brands and retailers; our reliance on third parties to drive traffic to our website; the success of the shopping centers in which our stores are located; our ability to adapt to consumer shopping preferences and develop and maintain a relevant and reliable omni-channel experience for our customers; our dependence upon independent third parties for the manufacture of all of our merchandise; availability constraints and price volatility in the raw materials used to manufacture our products; our sourcing a significant amount of our products from China; shortages of inventory, delayed shipments to our e-commerce customers and harm to our reputation due to difficulties or shut-down of our distribution facility; our reliance upon independent third-party transportation providers for substantially all of our product shipments; our growth strategy; our failure to attract and retain
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employees that reflect our brand image, embody our culture and possess the appropriate skill set; damage to our reputation arising from our use of social media, email and text messages; our reliance on third parties for the provision of certain services, including real estate management; our dependence upon key members of our executive management team; our reliance on information systems; system security risk issues that could disrupt our internal operations or information technology services; unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system, third-party computer systems we rely on, or otherwise; our failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection; payment-related risks that could increase our operating costs or subject us to potential liability; claims made against us resulting in litigation; changes in laws and regulations applicable to our business; regulatory actions or recalls arising from issues with product safety; our inability to protect our trademarks or other intellectual property rights; our substantial indebtedness and lease obligations; restrictions imposed by our indebtedness on our current and future operations; changes in tax laws or regulations or in our operations that may impact our effective tax rate; the possibility that we may recognize impairments of definite-lived assets; our failure to maintain adequate internal control over financial reporting; and the threat of war, terrorism or other catastrophes, including natural disasters, that could negatively impact our business.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the effect of known factors and it is impossible for us to anticipate all factors that could affect our actual results. We caution you that the important factors referenced above may not contain all of the factors that are important to you. The outcome of the events described in any of our forward-looking statements are also subject to risks, uncertainties and other factors described in our filings with the SEC, including the section entitled “Risk Factors” of the Prospectus Supplement, Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025, and Item 1A. “Risk Factors” and Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Quarterly Report on Form 10-Q for the quarter ended May 3, 2025, and elsewhere in this communication. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements as well as other cautionary statements that are made from time to time in our other filings with the SEC and public communications. You should evaluate all forward-looking statements included or incorporated by reference herein in the context of these risks and uncertainties.
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Exhibit 99.2
Torrid Holdings Inc. Announces Launch of Secondary Offering of Common Stock and Concurrent Share Repurchase
CITY OF INDUSTRY, CA – June 24, 2025 – Torrid Holdings Inc. (“Torrid” or the “Company”) (NYSE: CURV) today announced the launch of an underwritten public offering of 10,000,000 shares of common stock (the “Offering”) to be sold by certain stockholders of the Company (the “Selling Stockholders”). Torrid will not receive any of the proceeds from the sale of the shares by the Selling Stockholders. The Selling Stockholders intend to grant the underwriters a 30-day option to buy an additional 1,500,000 shares of common stock at the public offering price, less the underwriting discount and commissions.
In addition, Torrid has agreed to purchase from Sycamore Partners $20.0 million of Torrid’s shares of common stock at a price per share equal to the price per share to be paid by the underwriters in the Offering specified above (the “Concurrent Repurchase”). The Concurrent Repurchase was approved by Torrid’s board of directors acting on the recommendation of the audit committee. The repurchased shares will be held as treasury stock upon completion of the Concurrent Repurchase. The Concurrent Repurchase is expected to be consummated substantially concurrently with the closing of the Offering. The Offering is not conditioned upon the closing of the Concurrent Repurchase, but the Concurrent Repurchase is conditioned upon the closing of the Offering.
BofA Securities, Jefferies and William Blair are acting as joint lead book-running managers for the Offering. BTIG is acting as book-running manager for the Offering. Telsey Advisory Group is acting as co-manager for the Offering.
A registration statement (including a prospectus) on Form S-3 was initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 16, 2024, and has been declared effective. The Offering will be made only by means of a prospectus supplement and the accompanying prospectus. Before you invest, you should read the registration statement, the prospectus supplement, the accompanying prospectus and other documents the Company has filed or will file with the SEC for information about the Company and the Offering. You may obtain these documents free of charge by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, copies of the prospectus supplement and the accompanying prospectus, when available, may be obtained by contacting: BofA Securities, Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina, 28255-0001, or by email at [email protected]; Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, or by email at [email protected]; or William Blair & Company, L.L.C., Attention: Prospectus Department, 150 North Riverside Plaza, Chicago, IL 60606, or by email at [email protected].
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About TORRID
TORRID is a direct-to-consumer brand in North America dedicated to offering a diverse assortment of stylish apparel, intimates, and accessories skillfully designed for the curvy woman. Specializing in sizes 10 to 30, our primary focus is on providing fashionable, comfortable, and affordable options that meet the unique needs of our customers. Our extensive collection features high quality merchandise, including tops, bottoms, denim, dresses, intimates, activewear, footwear, and accessories. Our products are exclusive to us, and each product is meticulously crafted to cater to the needs of the curvy woman, empowering her to love the way she looks and feels. Our collections are artfully curated to suit all aspects of our customers’ lives, including casual weekends, work, dressy and special occasions. Understanding the importance of affordability, we aim to keep our prices reasonable without compromising on quality. This allows us to build a meaningful connection with our customers, distinguishing us from other brands that often overlook plus- and mid-size consumers. Our brand experience and product offerings establish us as a differentiated and reliable choice for plus- and mid-size customers, which we believe sets us apart in the market. We strive to be everything our customer needs in her closet, consistently delivering products that make her feel confident and stylish.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the size and timing of the Offering and the granting of an option by the Selling Stockholders to the underwriters to purchase additional shares of the Company’s common stock from the Selling Stockholders. These statements are not historical facts but rather are based on Torrid’s current expectations and projections regarding its business, operations and other factors relating thereto. Words such as “expect,” “intend,” “believe,” “may,” “will,” “should,” and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology) are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those set forth in the “Risk Factors” section of the registration statement and the prospectus supplement for the Offering and the Company’s other filings with the SEC. Any such forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and speak only as of the date of this press release. Torrid undertakes no duty to update any forward-looking statements made herein.
Contacts
Investors
ICR
Tom Filandro
Lyn Walther
Media
Joele Frank, Wilkinson Brimmer Katcher
Michael Freitag / Arielle Rothstein / Lyle Weston