Monday, August 4, 2008

Build-A-Bear Earnings Call: Bearville Important for Long-Term Growth

BuildABearville is important for the long-term growth of the Build-A-Bear Workshop,
Maxine Clark, Chairman of the Board & Chief Executive Bear, said in
the company’s Q 2008 earnings call last week. And it’s proceeding
beyond expectations so far: 4.6 million online characters have been
created since its launch last November, leading to almost 20 million total visits, with
daily visits increasing over 100% from the beginning of the year.

“First, the online world is where kids play today and will play even
more tomorrow. Simply said, this world is important for our brand to
stay relevant with our core guest,” Clark explained. “Second, the
online world offers us an opportunity to create synergies between our
real world and online world by attracting new and returning guests to
our stores. And third, BuildABearville gives our bridge to other
entertainment opportunities not in the traditional retail model. We’re
pleased with the growth we’ve experienced so far at The site is growing ahead of plan. [...] We talk
to visitors in the world often and are getting input from Bearville
citizens to help guide the development of the world.”

The unique advantage according to Clark is that while many major brands
have gotten involved in virtual worlds, Build-A-Bear is the only one to
have both a physical store and a virtual world. Of course, Disney has
stores in malls across America, but I don't think there's any major
crossover. With retail playing an increasingly important role in youth virtual worlds, that is significant. Build-A-Bear is actively focusing on the relationship between the physical store and virtual world.

"And last week for instance we launched our new rooms, you can add on
rooms, and we saw a 43% increase in new avatars made at
from the week before, same time period Friday, Saturday, Sunday,
Monday, a big phase, and because the rooms are so expensive, they’re
the most points to buy, the best way to get the most points is to buy
animals," explained Clark. "So we’ve structured those things. And we
think those things over time begin to build a huge reason why you go to
a store and you buy an animal just like they’ve done for other
companies who had no business and started from zero. So I think those
are already monetizing. Can you say that X millions of dollars were
absolutely totally associated to BuildABearville? No, but I think you
could say that because of the increased engagement the best customers
are staying engaged and the buzz is building and new customers are

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