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Build-A-Bear Workshop Inc. Message Board

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  • jacosa jacosa Aug 13, 2007 8:08 PM Flag

    Fixin' it

    When 2nd vs 1st year sales was a -1% change, it was an annoyance, and Ms Clark that their few 3rd year stores had built back up, which was reassuring. But now we have what is it, -6%? -8%? some awful comps numbers, and nobody is saying that third year stores are recovering. That's a problem. Not only did Shrek do worse than expected, the boys he brought into stores apparently inhibited girls from spending as much time and money (from the CC). I remember an even boy/girl mix the first time I went into a BBW store, and when I look now it's almost all girls (and a narrow age range, too). There's a problem alright, and companies with problems get whacked these days. Part of the severity of the stock hit comes from the hope that the ongoing "review of strategic alternatives" would lead to a buy-out, preferably for cash. The present credit market uncertainty does nothing to encourage that hope.

    It's a great concept. The stores look good, and the people they hire are a joy to talk to and to see in action. They've run into a marketing SNAFU, but fortunately the customer pool is renewed every year. Fix the marketing, advertising and merchandising and the earnings can jump faster than it's easy to imagine. But that is a difficult repair job.

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    • Mall traffic was down 7% with comps down 9% in the most recent quarter. Conceptually, mall traffic has slowed, in part, because of the convenience of shopping online. In order to target those non-mall-goers, BBW needs to recapture the lost in-store shopping experience (sales) with an on-line shopping experience. This what Webkinz has done well. The good thing is that building an interactive website is pretty easy in the whole scheme of things and there is no proprietary reason why BBW can't copy some of its competitor's ideas. BBW has stronger brand recognition and its website should catch on quickly.

      On the store front, malls are not going away any time soon. So the store model is good and very profitable. I would like to see BBW build a bit more on the "experience" and worry a little less about the merchandising cycles and acquisitions. It's the EXPERIENCE that draws people to the stores -- not really the products. I mean, you can get a stuffed animal anywhere -- the competitive advantage is the shopping experience! Instead of trying to "push" people into stores with the newest animal or sweepstakes, they should be trying to "pull" people into the store by making the build-a-{blank} experience better. Its the word of mouth about the EXPERIENCE that pays dividends, not the newest animal. And its the EXPERIENCE that will make or break other models like Ridemakerz and Friends 2B Made. By the way, did I mention that this is a rediculously STRONG BUY at current prices?

    • "but fortunately the customer pool is renewed every year."
      ==========================================================
      Nope. Replaceable kids are aging out of the core demographic BUT recent figures suggest that kids are simply tiring of building bears. The attrition is two-fold.

      Many shorts understand that building bears is actually boring after the first time or two.

 
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