I'm the first to admit that I have an attachment to stuffed animals. Although I never had a teddy bear as a kid, I had a lot of other animals that in retrospect had rather surreal designs. My favorite was Fluffy, a dog whose stuffing gradually leaked out of a hole in his stomach and whose material disintegrated into ratty old fabric. Fluffy and his compatriots are in my attic, awaiting their unlikely resurrection.
Personal attachment to a stuffed animal is one reason Build-A-BearWorkshop
Although fellow Fool Seth Jayson saw much to like about Build-A-Bear, our colleague David Meier was not so impressed with its IPO. I'm in David's camp, primarily because I have bad memories of another do-it-yourself store called Color Me Mine. There's nothing wrong with Color Me Mine's product. But the now-bankrupt restaurant chain KooKooRoo, via boneheaded CEO Kenneth Berg, made a diworsification move by buying this unprofitable ceramics business. The chain was subsequently sold off and has since gone private.
While there is a possibility that kids of all ages will enjoy bringing their own bear to life, there is also a good chance that this mascot bioengineering concept could be a fad. The company does have elements of a good strategy -- similar to Gillette's
At the end of the day, though, it's a retail business, and people (especially kids) are a notoriously fickle target group. One look at clothing retailers such as Hot Topic
I don't mean to knock the chain. I really, really hope it succeeds, actually. We need more huggable things in this world. Investors should be aware, however, that as snuggly as a company might be, its stock may have prickly surprises waiting inside.
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Fool contributor Lawrence Meyers does not own shares of any companies mentioned herein, but he still gives Fluffy the occasional hug.