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After reading Maxine Clark's book The Bear Necessities of Business, it's easy to understand why her Build-A-Bear Workshop
The Chief Executive Bear -- yes, that's her official title -- was an executive at Payless Shoesource
According to Clark, "It's my belief that every company can offer its customers an escape from the ordinary, perhaps not on the same scale as Disney, but with small, inexpensive, and unexpected gestures." That's why children are active participants in Build-A-Bear's creation process, why each bear comes with a birth certificate, and why Clark sends so many thank-you notes to purchasers.
Clark actually got the idea for Build-A-Bear from a friend, Katie Burkhardt, who thought it would be simple to make teddy bears. With that dose of inspiration, Clark supplied the perspiration, wrote an extensive business plan, withdrew $750,000 from her retirement account, and launched the first store in St. Louis. Within a year, sales topped $1.7 million, handily beating her projections.
The rest is history. Today, Build-A-Bear is a powerhouse, having sold more than 47 million furry friends. With 271 retail stores in the U.S., Canada, and the U.K., revenue has averaged 26.5% annual growth over the past few years. Earnings per share have grown even faster, at 53% per year.
Clark realizes the company can't do everything, so she focuses on its core competencies and its culture. Build-A-Bear outsources its real estate planning and aggressively forms partnerships with great organizations such as Limited Brands
Clark has spent considerable time building a unique corporate culture at Build-A-Bear. The company's Bearquarters is decorated with pictures of its customers. Clark answers every email and frequently visits stores. To better understand her customers, she has an advisory board made up of pre-teens. After all, if you want to know what kids want, why not ask them?
While facts like these are fun stuff, Build-A-Bear also works hard on the concrete details of inventory management, outsourcing, product development, and information technology systems. In addition, the bear-birthing process and store layouts have been carefully designed to enhance the experience while gently promoting sales. The company's new 350,000 square-foot distribution facility in Ohio is a recent, crucial achievement, aiding the company's time to market, inventory control, and future growth plans.
Build-A-Bear believes there's still plenty of room to grow in the U.S., while international opportunities remain in their early stages. Build-A-Bear is also leveraging its platform and expertise into new retail concepts, including Build-A-Dino and the custom dolls of Friends 2B Made. It also has the opportunity to turn buildabear.com into a community that enhances brand loyalty and sales, much like Webkinz does. The 18 million unique households in the company's database so far provide ample opportunities for such efforts.
Although she's been a big help for millions of moms and kids, Clark never had kids of her own. In light of her devotion to Build-A-Bear, I don't think she'd have enough time.
I don't know about you, but I'll definitely be getting my mom a copy of Clark's book this Mother's Day.
Further fuzzy Foolishness:
Disney is a Stock Advisor selection, while Limited Brands is an Income Investor recommendation. If your mom likes great investment opportunities, sign her up today for a free trial to either market-beating newsletter.
Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,610 out of 28,402 in CAPS.
