white lacoste polo Bear CEO plans new store layouts
Kids sit transfixed in the back of Build A Bear Workshop stores, staring at refrigerator sized machines that churn out the cloudlike fluff used to fill bears, super heroes and other characters.
The stuffing machines which insert the exact amount of filling based on the desired softness a customer wants the toy are a big part of the appeal has helped the 400 store chain sell 140 million bears and other stuffed animals since 1997.
Soon, however, those captivating stuffing machines will be placed closer to the front of the stores to increase their visibility. The machines are also getting a new shape and design to make them more eye catching, Build A Bear’s CEO Sharon Price John said in an interview Friday at the company’s Overland headquarters.
“Mall traffic has been flat to down, and you really have to work every footstep that goes in there,” John told the Post Dispatch. “Pulling that way up front in the stores should provide some in store theater for us.”
John is in the midst of a turnaround at Build A Bear that began in 2012 and goes far beyond moving store equipment. Since she became CEO in June 2013, Build A Bear has closed dozens of underperforming stores, expanded the chain’s licensing to include more characters from movies such as “Frozen” and “Teenage Mutant Ninja Turtles,” and reduced coupons that cut into revenue.
“People don’t care about coupons,” John said. “We’re not a discount brand. They come because they care about the experience.”
The chain’s stores are getting smaller, too. Stores are averaging about 3,000 square feet now, but John is targeting a smaller footprint of about 2,200 to 2,500 square feet.
Those changes have helped buoy sales and profitability at the company founded by Maxine Clark with a single location in the St. Louis Galleria in 1997 and that now has a worldwide presence, with stores in the United Kingdom, Denmark and other countries.
Clark still sits on the company’s board of directors and remains one of Build A Bear’s largest shareholders.
After three years of declining sales from fiscal years 2011 to 2013, Build A Bear finally saw a sales increase in fiscal 2014 ended Jan. 3, growing to $392.4 million, a nearly 4 percent increase over 2013. Fiscal 2014 had 53 weeks versus 52 in 2013, but even without the extra week, sales were up.
The company, which reported earnings on Thursday, posted a $14.4 million profit last year, compared with a loss of $2.1 million in 2013, marking its first profitable year since 2010. And, same store sales for Build A Bear stores open at least a year grew 9.9 percent in the fourth quarter that ended Jan. 3, compared with a year earlier.
When the turnaround efforts began, 22 percent of the chain’s North American stores were unprofitable. That’s since dropped to 2 percent.
Wall Street has taken notice. Build A Bear’s stock rose from about $8 a share a year ago to $19.37 a share Friday.
“The turnaround that they’ve brought in the last year to two years has been nothing short of amazing,” said Jason Long, a retail consultant and owner of Shift Marketing Group in Manchester.
“Clearly, Sharon Price John has brought change to the organization,” he said. “They’ve gotten a handle on closing underperforming stores, and at the end of the day, they have a unique product, and the new CEO has learned that well.”
John came to Build A Bear after leading footwear company Stride Rite Children’s Group as president for three years until 2013. Prior to that, she worked for more than a decade as an executive at Hasbro and Mattel.
“Sharon’s appointment brought not only a great deal of experience in toys and retail, but it also brought a perspective on the consumer end market that was grounded in insights on how consumers purchase and why they purchase,” said Stephanie Wissink, a senior research analyst at Piper Jaffray Co.
John said she’s focusing on adding products that draw in new customers outside of the chain’s core customer base. Nearly two thirds of Build A Bear’s customers are under 8 years old, and more than two thirds are girls. This year, Build Build A Bear debuted a Toothless character from the movie “How to Train Your Dragon 2,” and 40 percent of sales came from customers over the age of 12.
“That one caught us off guard,” John said.
Build A Bear is looking to grow the collector market with new offerings. Build A Bear plans to debut a limited edition Disney licensed “Cinderella” bear priced at $80 tied to a movie coming out this spring, and “Star Wars” characters later in the year.
Build A Bear also is adding is new product line that comes with access to an app, Promise Pets, that’s designed to appeal to older boys and girls. More product expansion is on the horizon. Build A Bear is evaluating adding toys for children from birth to 3 years old.
Beyond new products, Build A Bear is focusing on adding more locations outside of traditional malls. The chain opened five temporary stores around the holidays in Macy’s stores, and plans to open more stores in high traffic tourist areas, outlet malls and shop in shops in the future, John said.
International growth also is part of John’s growth strategy. Last year, a franchisee opened two stores in Turkey, which marked the first time Build A Bear has entered a new country in three years. Build A Bear lacks a presence in several key global growth markets, including China, where John said she sees opportunities to expand.
In the second half of 2015, Build A Bear will debut a new store design that incorporates new brand elements, including an updated logo. Store signage also will change to highlight a wider array of licensed characters now available from the Incredible Hulk bears to “Avengers” characters.
Later this year, fans of the Build a Bear brand will also see products available at retailers outside of the chain’s stores. The company plans to add outbound licensing deals that will use the Build a Bear brand on products such as backpacks.