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After '09 loss, Build-A-Bear positions for growth

By Staff -- Gifts and Dec, 2/19/2010 8:09:00 AM

ST. LOUIS—Custom plush retailer Build-A-Bear Workshop swung to a loss in 2009, hampered by a double-digit drop in domestic sales and various charges.

The retailer’s net loss for 2009 was $12.5 million, or $0.66 per diluted share, compared to the 53-week fiscal 2008’s net income of $4.6 million, or $0.24 per diluted share. 2009’s results included $10.9 million in charges related to store asset impairment, its investment in retailer Ridemakerz and closing its handful of Friends 2B Made concept stores.

Net retail sales for the year fell 16 percent to $388.6 million, driven downward by a 16.7 percent drop in North American same store sales. Same store sales at the retailer’s European locations rose 5 percent, driving up overall European net sales 4 percent.

Total revenue for the year topped out at $394.4 million, down 15.7 percent from 2008’s $467.9 million total.

The results followed a fourth quarter in which Build-A-Bear’s net retail sales slipped 13 percent to $121.2 million and consolidated comparable store sales fell nearly 10 percent, with a 4.5 percent increase in European same store sales offset by a 13 percent dip at North American stores. Total revenue during the quarter was $122.9 million, down 13.5 percent from the corresponding period of 2008.

All told, the fourth quarter saw a net loss of $0.9 million, or $0.05 per diluted share, compared to the fiscal 2008 fourth quarter net income of $5.0 million or $0.27 per diluted share. The 2009 quarter’s loss included $6.6 million in non-cash charges.

Results would have been worse but for a $25 million reduction in expenses.

“The number one objective in 2010 is to increase shareholder value by driving revenues and profits,” said Chief Executive Bear Maxine Clark. “We will achieve these results through product innovation, focused marketing and disciplined store operations. As we begin 2010, we are pleased with the response to our new product launches, which have driven further improvement in our comparable store sales trend.”

Among those new product moves is the addition of Cepia’s Zhu Zhu Pets plush to its assortment, the full roll-out of which will be complete by next month and will include some exclusive products, plus a growing business in licensed designs, such as recent efforts featuring the likes of iCarly (pictured above: All About iCarly Bear) and Alvin and the Chipmunks, and holiday themed merchandise. Earlier this month, the retailer said it would team with A Squared Entertainment for an outbound licensing program that would see Build-A-Bear Workshop branded merchandise—including DVDs, accessories, apparel and books—sold by other retailers.

At the end of 2009, Build-A-Bear Workshop operated 345 company-owned stores: 291 in North America and 54 in Europe. During fiscal 2009, the company opened one new store in North America, compared with 20 new stores during 2008. In Europe, the Company did not open any new stores compared with five new stores during 2008.

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