Build-A-Bear Workshop is serious about its business. Owning all of its United States locations outright, the company only franchises to international locations outside of Puerto Rico, Canada and the United Kingdom. It is currently in the midst of a turnaround to reinvigorate the brand and drive profits at the 15-year-old chain.
The company, started by Maxine Clark in St. Louis, Missouri, lost $36.5 million during Q4 of last year. There may be more pain to come as it invests capital to renovate aging stores across America. The goal is to give Build-A-Bear stores a more modern, tech-driven look and impressive customer experience.
Fans of the store describe it as having helpful staff and being a memorable experience for children. Downsides include the price of bears, which start at around $10 but can quickly balloon to over $50 with the wide range of accessories available.
Those accessories are one of the main attractions that distinguish Build-A-Bear from other toy shops, besides the experience of making a bear in the store. Forbes recently documented the phenomenon of young female Millenials buying these bear accessories for their pets. Accessories are available for special occasions such as Valentines Day, Halloween, and Christmas. Specially themed items are also sold on an ever-updated basis, including One Direction hoodies and Girl Scout uniforms. It's no wonder that they keep coming back to buy more.
Certainly Build-A-Bear hopes that this positive word-of-mouth will help drive sales and profits over the next two years, and bounce back from last quarter's results. But in order to give it a push, it has actively begun remodeling its locations to create a better customer experience. So far it is working, with a better rating overall at stores that received the overhaul.
Part of the turnaround involves cost-cutting. Stores that are not performing well are slated for closing, while cost savings at stores have netted over $7 million that can be reinvested into stores.
Turning around also means growing the business, so in the midst of store closings the company will also expand its profitable international franchising efforts. Their stated number of international locations is currently 400.
Finally, Build-A-Bear Workshop is testing new ways of engaging customers. It recently partnered with Vibes, a mobile marketing and technology company, to send offers to customers through the web. Customers redeemed those offers in store, effectively re-engaging loyal customers through the campaign. The company has also utilized TV advertising to drive positive perception of the brand and its experience.
CEO Clark announced in January her decision to step down soon after years of running the company. With the bold changes taking place currently, Build-A-Bear hopes to be at the top of its game by the end of 2014. The relentless drive for improved customer service bodes well for a company that brings delight to both children and the occasional Millenial shopping for her pet.
