ST. LOUIS-Build-A-Bear Workshop will debut a virtual world later this year, adding cyberspace communities to its continuing growth in the real world, executives said at the company's third quarter conference call. Beginning Nov. 1., customers will get a pass to its new virtual world website, which will have a virtual store, and allow members to have adventures with recently purchased bears and conduct live chats. The program is free.
“We realize that in the last 12 to 18 months, children's play patterns, particularly girls, have shifted to the online world,” says Maxine Clark, chairman and chief executive bear. “Our new site will be highly complementary to our existing stores.”
Those stores will continue to increase, as the company continues to grow its signature Build-A-Bear Stores in North America and overseas, as well as expand its test of the Ridermakerz toy car stores.
The company plans to open eight new North America stores in fourth quarter, up from six new stores opened during the 2006 fourth quarter. Additionally, the company plans to open three new stores in the United Kingdom and one new store in France in the 2007 fourth quarter. Overall, the chain will have opened 39 new stores in North America, eight new stores in the United Kingdom and three new stores in France in 2007. By year-end franchisees will have open 19 units around the world, including market entries in South Africa. Growth plans for 2008 are still under review.
The company has tested lifestyle center locations, but expansion will focus on malls for now, despite a recent slowdown in customer traffic.
“So far, we've found that [lifestyle centers] are not as strong for us as an enclosed mall,” Clark says. “We need the critical mass, the fashion consumers.”
The company also is expanding its test of Ridemakerz, the Retal Entertainment Concepts customized toy car store in which it has invested. Two units already are open, with another two stores to open in malls this fall. Eight to 10 locations will be opened next year in various formats.
“We continue to be excited with our partnership, and look forward to our first holiday season,” Clark says.
Total revenue was $109.8 million, up 8.2% from the previous year. Net income was $3.0 million, up from $2.7 million in 2006. Comparable store sales in North America declined 10.1% compared to a decline of 5.8% in the 2006 third quarter.
At the end of the quarter, Build-A-Bear Workshop stores totaled 264 in North America and 45 company-owned stores in Europe.
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