Build-A-Bear In Expansion Push

The company, which operates 200 Build-A-Bear locations in the United States and Canada, said it has reached franchising agreements with 12 foreign countries that could put 350 bear-building stores on the international map within the next few years. But the company's bear expansion doesn't end there.

Company officials told analysts and investors at the JP Morgan Consumer & Retail Holiday Conference here on Thursday that it also is planning to up the ante to 350 stores in the US and Canada too.

"We see a solid five- to seven-year growth stage ahead of us just to reach the full potential for Build-A-Bear Workshops," said Barry Erdos, whose title officially lists him as president and chief operating "bear" for the company.

The firm, which started a second venture last year along the same lines known as "Friends To Be Made," also has signed licensing agreements to put more than 40 of its branded products on store shelves by this spring.

If all those expansion plans and licensing agreements seem a bit too ambitious for a company that started in 1997, you would never know it from the bottom line. Last year alone, sales at Build-A-Bear's mall-based stores stood at $600 per sf, one of the highest per sf sales of all mall retailers."Build-A-Bear Workshops have delivered impressive financial performance," notes Erdos.

Indeed it has. In 2004, the company exceeded its revenue and net income targets and is on the path to set record revenues this year. Third quarter revenues have already increased by 26% or $84 million thanks to franchise fees and licensing agreement, retail sales are up by more than 25% or $17 million and internet sales have jumped more than 50% to $1.4 million. And, notes Erdos, it has all occurred without resorting to a sale, markdown or even a single customer exchange.