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Build-A-Bear Workshop Inc. Message Board

  • tripola23 tripola23 Jan 4, 2008 2:05 PM Flag

    Worst Case for BBW

    Time to talk about Book Value and liquidation, partial or whole.

    Many of BBW's assets are very soft. How much are bear building equipment and skins worth in liquidation? Near zero. What about those costly custom store fixtures? About zero.

    Interesting question is the value of their computer lists. Can they be sold to others as an asset? This is often confidential info about minors.

    I've ALWAYS said, this is a company with a huge downside (high priced mall leases) and apparently no viable Plan B.

    Obviously, the market now agrees.

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    • Dude, what are you talking about? Let's look at one example to show how stupid your comments are. TiVo loses millions per quarter and has for years. BBW makes millions in profit per quarter. Neither of them are in liquidation mode so that gives you a flavor of how long BBW can go before liquidation comes into play. BBW's profits would have to dry up, and then they would have to fall deep into the red before for several years before any sort of liquidation came into play.

      • 1 Reply to bobbert987
      • Big retailers are in constant state of store liquidation even when things are going well... I'm talking first about closing failed individual stores.

        If SSS continues to plummet, units falling beneath breakeven will likely skyrocket.

        Later BBW --or a buyer-- may elect to shut concepts such as Dino or ultra costly locations such as NYC. They may wish to leave whole states or regions. BBW is already talking about having smaller stores.

        While many investors nowadays rarely think beyond the next quarter, any buyer of the whole company will be looking far ahead and at the weakening SSS. He'll certainly wonder about worst case liquidation value, too. Book value doesn't show that.

        Inventory of bear skins, used stuffing machines, custom fixtures and signage may have microscopic value. Closing may also mean employee severance and lease termination costs. There may be accounting charges when booked assets are impaired.

        Check the pathetic stock price. Time to talk about something besides fantasies of "Lines Around the Block"

    • 29-sept-07 Balance Sheet

      Inventory $54,000,000
      Bear skins, bear clothing, I guess

      Property Plant and Equipment $137,000,000

      Goodwill $43,000,000 (on UK acquisition?)

      Not suggesting the balance sheet is weak, But they wouldn't get much for some of this in liquidation

    • Why exit a nice steady business just because merchandising was off-target? Building and clothing plush dolls is gonna be around for a while.

      • 1 Reply to jacosa
      • "Why exit a nice steady business just because merchandising was off-target? Building and clothing plush dolls is gonna be around for a while."

        Building bears WILL be around for awhile but not in lavishly fixtured high rent mall stores on long term leases.

        That's the stupidity of BBW. If you consider the downside, rather than focusing on the faddish upside, this is a very scary company. Lots of things can make money but very few can do it from $50/Square Foot locations.

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