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Bear Marketing

Little ones help Build-A-Bear build big sales

By Kevin Kenyon

For more information visit Build-A-Bear Workshop on the Web

At a time when much of a retailer's day is spent digesting information such as stock quotes, sales per square foot and merchandising strategies, Maxine Clark spends hers quizzing 10-year-olds.

Clark, 49, is the founder and CEB (chief executive bear) of Build-A-Bear Workshop, an expanding made-to-order teddy bear chain based in St. Louis, which has quickly begun to attract the attention of shopping center developers.

The stores average sales of $750 per square foot, with some locations topping $1,000, according to Build-A-Bear.

It is not uncommon, for example, to see crowds of children, parents, and grandparents lined up outside one of the stores well before opening.

Many of the ideas behind the store come from an unlikely source: an advisory board consisting of small children with large imaginations.

"Before I ever had financial partners I had a group of children between the ages of 6 and 14 that I ran everything by, seeing what they liked, what they didn't like," Clark said. "They really helped me and gave me a lot of great ideas that I never would have thought of."

The interactive stores, which range from 2,200 to 4,000 square feet and cost $500,000 to build, essentially allow customers to make their own stuffed animals from scratch via a teddy bear assembly line.

The concept is simple yet imaginative: Customers first choose from a variety of unstuffed animals (bears, cats, dogs, frogs), and then circle the perimeter of the store adding a wide variety of accessories along the way, including a heart (children are asked to kiss it and rub it in their hands), before heading to the cash register in the center.

The first Build-A-Bear Workshop opened in the Saint Louis Galleria in the fall of 1997, followed by locations in Kansas and Illinois last year. At press time, the chain had opened seven units in 1999, including stores in Florida (2), Arizona, Georgia, Texas, Virginia and South Carolina. Three more (Florida, Indiana, Georgia) are expected to open by year-end.

Plans are now under way for a U.S.-wide rollout, with an eventual goal of 200 stores by 2005, according to Build-A-Bear officials.

Michele Schembre, marketing director for Saint Louis Galleria, which is owned by St. Louis-based Hycel Properties, said the store has received an overwhelming response right from the start.

"There continues to be people waiting as the gate goes up every morning, and the excitement has yet to die down despite the fact the store opened two years ago."

Although the Galleria is often used as a testing ground for new retail concepts (it housed the first Gap Men's and Eddie Bauer Home stores), Schembre said she's yet to see anything quite like the response Build-A-Bear has received.

The story behind Build-A-Bear starts and ends with Clark, who views the chain as her personal interpretation of what retailing should be, but often isn't, in a world dominated by spreadsheets and stock quotes.

"With all the pressure on sales per square foot and merchandise intensity and all the lingo that goes on, you tend to forget that we're here to create something that's entertaining, which boils down to a fun shopping experience," she said. "I think we kind of forgot about that with all the pressure from Wall Street."

Retailing 101

Sales at Build-A-Bear Workshop run more than $1,000 a square foot at some stores.

Clark received her first lesson in retailing as a young child growing up in Florida, where her mother would take her and sister Sharon shopping at the Burdine's department store in downtown Miami.

"I used to love going to Burdine's. They used to have this circus on the roof, and after you came out of the circus you went to this store called the Little Shop, which was a place for kids to buy presents for their brothers, sisters and parents. Everything was really low — you could reach it — it was all done kind of like Santa's toyland. At least that's how I envisioned it.

"I have never forgotten that in my entire life, and it's the standard by which I measure everything that I go to."

Clark's first attempt to put those lessons into practice came in 1977 as the director of merchandise planning and development for The May Department Stores Co., St. Louis, where she was charged with creating a department for kids. She named it "The Land of Ahhs," and molded it into a gift-shop wonderland in the middle of the children's department.

"It was really well received and I had a lot of fun doing it, but most of the time, there's just not enough room in a department store to create that type of environment."

A different lesson

Clark had been schooled, however, in the bottom-line driven world of retailing, starting out in 1972 as an executive trainee for The Hecht Co. in Washington, D.C. She also served as executive vice president of marketing for St. Louis-based Venture Stores.

In 1992, after her stints with The May Co. and Venture, she rose through the ranks to become the president of a $2 billion shoe chain, Payless ShoeSource, where she expanded its children's business.

Unfortunately, she soon came to a depressing conclusion: The higher she ascended the corporate ladder, the less she was able to use the skills she had developed in merchandising to kids.

"It was at that point that I decided that I wanted to leave and start a business in the children's area, one that would exemplify what retailing really should be," she said.

The only question that remained, however, was what type of business?

Clark drew from her experience at Topeka, Kan.-based Payless — where she often spent hours talking to parents and listening to their shopping frustrations. "At some point I realized that we haven't been listening to the customer, we may have been talking to them, or at them, but we weren't listening to them," she said.

The next Barney?

She began looking at a wide variety of potential licensed products that might be translated into retail, but nothing really clicked. Maybe, she thought, there was another Barney (the ubiquitous purple dinosaur) out there, and the person who invented it just didn't know how to take it to the marketplace.

It was at that point that Clark went on a trip with a friend to a toy factory for fun.

"I saw how all the kids responded — even though they didn't get to do much, they were so excited just to witness the experience," she said. "I found a factory and tried to buy it, but they didn't want to sell it. So I decided I would reinvent the experience for the retail environment."

Things really crystallized after a visit from Clark's good friend, Katie, who is 13 now, but was 10 at the time. "She had a bear named George who went just about everywhere with her, and at some point the idea just clicked," she said. "It sort of like when things come together at the right moment, and you say 'This is it.' "

Clark said Katie enthusiastically endorsed the idea. "She actually said to me, 'You need to do this, this is awesome, this would be the greatest idea, all my friends would come.' "

Thus, the advisory board was born.

The group, according to Clark, would sit around talking about names for the animals and what type of animals we should have, the design of the store — "just about anything you can think of."

Today the advisory board still makes a lot of the company's decisions, even reviewing marketing materials before they're sent out.

"We really depend on them quite a bit," Clark said. "They remind you that you're still a kid inside, that you can't let go of that, and that forms the basis of the company's culture."

Bear University

Maxine Clark, chief executive bear, Build-A-Bear Workshop

Before opening a store in a new market, Clark brings senior management to the company's St. Louis headquarters, where they take part in a month of workshops and classes aimed at transferring the company's culture to its employees.

Barbara Ashley, president of Retail Ventures, a New York-based retail consultancy, said Build-A-Bear is already an exciting contribution to the retail scene.

"They're fun, totally individualized and personalized, which is a big part of its appeal," she said, referring to the bears and animals. "There are not a lot of things that most people need anymore, so purchases have to be stimulated by desire rather than need."

As she prepares for a U.S.-wide rollout, Clark says she's finding the greatest challenge is finding the type of locations the company wants.

"The malls we want to be in don't just necessarily have a store because we want to open there," she said, noting that the company seeks "A" type malls in premier shopping or tourist locations.

Build-A-Bear has already developed relationships with Simon Property Group, General Growth, Urban Retail Properties and Taubman Centers, which should help the company reach its goal of opening between 35 and 40 stores a year.

Geographically, the company, which currently only has stores as far north as Tyson's Corner in McLean, Va., plans to open its first stores next year in Philadelphia, Baltimore, New York, New Jersey and Boston.

Despite her past successes, she said her greatest joy comes from creating the same excitement she once felt as a young child for a whole new generation of shoppers.

"To have people waiting outside the stores and to see the look on their faces is beyond my wildest expectations of anything I thought possible," she said.

Sales at Build-A-Bear Workshop run more than $1,000 a square foot at some stores.