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- [00:01]
A
The Uniswap wallet makes crypto easier and safer to own and use, discover new tokens, research confidently, swap instantly, and manage it all securely in one place. The Uniswap trading protocol has powered over $3 trillion in volume, and it's trusted by millions worldwide. Buy your first crypto assets in a few taps and experience the freedom of decentralized finance with Uniswap. Tap the banner to get started. Lululemon sheds its CEO in a mission to bring back its X Factor and cannabis companies are riding high on expectations of a policy shift at the White House. We survey stocks making some big moves today and Build A Bear riding the plush booms in kidd alting and nostalgia. But there was a time when the retailer had lost its stuff. So I talk to our CEO of the Week in studio on Build A Bear's turnaround story and a scoop on where it's going next. For Friday, December 12th, it's Brew Markets Daily and I'm Ann Berry. More market details to come, but first, turnarounds of public companies are notoriously difficult. We talk about that a lot on this show. Restructuring announcements spook employees and vendors alike. Difficult decisions have a tendency to get leaked to the press, and investors, whether they're in it for the long term or not, pore over every quarterly report seeking signs of improvement, even when deep down they know that real change takes time. So for our CEO of the Week, we're delighted to be joined in studio by one public company leader who's done it and succeeded. That's Sharon Price John, who's been president and CEO of Build a Bear Workshop for 12 and a half years now. When she took over in 2013, Build a Bear had lost nearly $48 million the previous year and about 20% of the store portfolio didn't turn a profit. While today, build a bear, that's ticker BBW has a market cap of nearly $700 million, recently reported record third quarter revenue of over 122 million and has navigated not only a turnaround, but also the COVID 19 pandemic and now tariffs all. With Sharon at the helm, we break down her playbook for rebuilding operational strength. Taking a cherished bricks and mortar brand online. We land a scoop on what's next for Build A Bear in video content. So here's my conversation with Sharon Price John, president and CEO of Build A Bear. There is a lot that I want to talk about and I'm going to just tee you up for our listeners. I could listen to your accent all day, which is a comment that I get. So I'm very excited that we're going to have a chapter. We're going to have a great time. Let's talk about Build a Bear, which is a brand that's so conducive to having a great time. Anyway, it's one we associate with joy. We're in the holiday season. There's a lot of really exciting stuff that we're going to talk about. Stuff, pun intended. But first of all, let's get some of the difficult things out of the way. You just had your earnings last Thursday. You hit record third quarter revenue of nearly $123 million. That's right. But your shares got hit by more than 15% because tariffs did impact your business. How frustrating. When you've knocked it out of the park on the revenue side, what are you going to do about it? What is the answer to the tariff impact?
- [03:23]
B
Well, I'm not going to even put that in the category of frustrating. I think that there is a lot of ups and downs and evolution in the way you run companies and business and since the way stock prices react. So while we did, we have our best third quarter in history, our best first nine months in history, and we actually reaffirmed guidance. And that guidance at the midpoint put us about a $500 billion revenue, which would be the fifth consecutive year of record results. There was no misunderstanding, at least from what we believed and how we've communicated on the negative impact of tariffs in the back half of the year. The reaffirmation of guidance would prove that. So there should have been no surprises from what we've reported and what we've shared about the tariff impact. What had happened, I think, is that other companies had started to see some tariffs roll through of the big importing companies, even some of the big toy companies, more in the second quarter. We had a very light hit in the second quarter, about a million bucks and expect a total of approaching 11 million before the end of the year, the majority being in the fourth quarter because that's what we sell and import the imports for, the majority.
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A
But how do you fix it? What do you do to your supply chain to mitigate this longer term?
- [04:46]
B
Well, we've been doing that. Right. So the reason we didn't see anything in the second quarter that helped people get adjusted to the fact that we were going to be impacted was we pulled forward so much inventory into the prior year and had a long Runway of untariffed product. Yep. So, you know, this is nothing new. And if you also noted the next day we, we bounce back a little bit. I think sometimes, tariffs or no tariffs, people trade on the headlines. And then the second day you get in there and people start to understand, oh, the fundamentals are absolutely fine. They reaffirm guidance. Everybody knew this, that, you know, it was just one of those sort of like almost as if we had just so. So continuously posted record results.
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Yes.
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That the moment that they're like, oh, you know, we see a little pre tax softness here. No, but the fundamentals are still there.
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A
That sort of emotional roller coaster that we're seeing in the market. By the way, we've seen it in tech, so seeing it absolutely here with your business too, makes a ton of sense. This message may be shocking to many millennials. If you are one, you might want to sit down. Right now, loads of people are searching the following on low rise jeans, halter top, velour, tracksuit, puka shell necklace, disc belt. You likely placed these in the dark of your closet in 2004, never to be seen again. But if you can find it in yourself to dust them off, there are a lot of people who will give you money for them. Sell on Depop, where taste recognizes taste. I want to talk about what you have done, what you've achieved as CEO of Build a Bear Workshop, which you've been for 12 and a half years President, as well as part of your title. When you took over that seat in 2013, Build a Bear had lost nearly $48 million. The previous year, 20% of the store base was not turning a profit. Turnarounds are really hard to execute on. Turning around is very hard. To do it in the public eye as a publicly traded company is even harder. One pillar that has been sort of a focus of that turnaround strategy has been international. Tell us what you did with that international part of the business and where it is now.
- [07:07]
B
Well, very interesting question. And that came in the tail end of what I would consider the turnaround piece. There was so many other basic constructs that needed to be deconstructed and relooked at and repositioned because at the time, the company had been contracting for about eight years. And that was in the wake of the recession. Right. And it wasn't unusual for a company or any kind of business that had been really successful when they first started to have a difficult time evolving the strategy, the organizational approach, marketing approach, product approach, when you were so successful. But it's difficult to not do that because of your success. But the world had changed. So if you Recall during that time period there was a lot of contraction in retail, particularly mall retail. And then you add that on top of what was this emerging what are we going to do with all this E Comm taking over the world? Right. And that particular piece of the business. The company didn't really think they could participate in the digital economy because the experience which is our, I mean that's the underpinnings of who we are, was really going to be difficult, if not impossible to replicate. So we really had to rethink everything that we were. And that led us to almost like redefining who our consumer base could be. So we expanded our addressable market to kids and adults. So it's not just those kids that are coming in, but now people who had been to Build a Bear. So we became, we were becoming multigenerational. So you had this big stretchy market. We then redefined where we could be as a retailer. We were not trapped in malls. It was a sort of a preconceived idea that malls was where Build a Bear should be, is supposed to be. But really what the strategy was, if you really pull it apart, it was to be where families and people go for fun and entertainment.
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A
So where did you go beyond malls at that point?
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B
Well, at that point, well, when we had already been in some of these locations. So yeah, 20% of the stores were unprofitable. So 80% were. We're profitable. I'm like, guys, something's holding this together. What is it? Let's dig down into the data. Let's figure out what are the connecting tissues of the best performing stores that we have. And don't look at it like north, south, east, west, big mall, little mall footprint. I don't want that stuff. I want the good stuff, like the big metrics, DPT or dollars per transaction unit per traction conversion. All the things that really drive the business. And what we discovered is that we overperform on every key metric in stores where 50% or more of the transactions were from 50 or more miles away from the consumer.
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A
Oh, so it's a destination.
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B
Bingo.
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A
Interesting.
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B
So the destination based construct then started to drive our thoughts of where should we be looking at? Like who should we be talking to. So that went into tourism, hospitality. So everything from Carnival Cruise Lines to Great Wolf Lodge to Six Flags to, you know, then even in some things where we're in and out during the holiday season, like the, like Gaylord puts together an entirely. Just an incredible holiday in their huge properties.
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A
Yeah, the lobbies. And there's so much so we participate.
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B
In that and that opened up an entire new venue for us.
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A
Interesting. And then how about international, as part of that review, did you find those same pieces of connective tissue translated to international markets in the same way?
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B
That was certainly true. But what we needed to do, and sometimes you have to contract to grow. Right. So we had a franchise model mostly outside the United States. Now we have corporately operated stores in Canada and the UK and Ireland, but most everywhere else it was a franchise relationship and they were not as successful for the most part as we had wanted them to be. And we really needed to relook at the business model. And we actually came up with a new business model that was a hybrid between corporately operated and franchise, which we call partner operated so that we could expand in a capital light way, but with a little bit of a different approach. And that's what we've been using in the last few years. And we actually held back on that international expansion because when you're going to be using someone else's capital and you're going to be partnering where you're not in direct control, you definitely want to have an organization where you have already demonstrated sustained, profitable growth. Because why would they want to partner with you if you're not going to provide them with proven marketing, proven training, proven products, proven in store experiences? And that's what we were able to do.
- [12:26]
A
I want to come back to something you touched on, Sharon, which is build a bear is so synonymous with an amazing in store experience. The joy of a child walking in, picking out their bear, picking out the stuffing, the smell, the whole tactile experience of it. How do you translate that to an E commerce experience?
- [12:45]
B
Yeah, so great question. And that's the other place where we expanded of recognizing that we did not have to replicate that experience online. And the big unlock was actually tied back to the first portion of the strategy of expanding the addressable market. So the older consumers, our teens and adults, which now represent 40% of our business, were not as tied to to going through the experience. Right. So sometimes in retail, particularly in apparel, it's a completely fluid consumer base that's going from the in store experience to the online experience. Sometimes they shop online and return it in store or whatever, you know, whatever different dynamics are happening. That is not the way our business works. So in some ways our E commerce, because we focus on gift givers, collectibles and superfans, is incremental, more incremental for us. So we over index with adults online and we over Index with the core consumer, the kids in store. But here's the thing. You have to understand that no matter how you slice it, that store experience that you're talking about, where you're choosing something, where you're being creative, where you're, it's very personal. You go through a heart ceremony and you're kind of bringing this furry friend to life and it's like yours forever, you name it, it's really special. I was in the stores all day yesterday and watching this and it's always fun to kind of, kind of do that. But that piece of who we are is why we exist, right? So that, that branded element, that's where we build our equity. That's why we're able to stretch and halo into things where you don't have to have the experience because the consumer's kind of carrying that with them.
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A
And nostalgia too is the same way.
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B
Oh yeah. And we are most definitely benefiting from the cadulting trip, the nostalgia economy right now. But it was funny though because when we were struggling trying to get the stores to be successful, it was an easy thing to say, well, you know, just close all your stores and open E Comm. I'm like, I don't think that'll work in the long run. We have to have now these 200, almost 250 million heart ceremonies that create that indelible memory for us to have a long term vision of what we're able to be.
- [15:14]
A
Let's take a quick break and then more of my conversation with Sharon Price. John, in just a moment.
- [15:20]
B
Toast the holidays in a new way and raise a glass of rumchata, a delicious creamy blend of horchata with rum. Enjoy it over ice cream or in your coffee. Rumchata. Your holiday cocktails just got sweeter. Tap or click the banner for more. Drink responsibly. Caribbean rum with real dairy cream, natural and artificial flavors. Alcohol 13.75% by volume 27.5 proof. Copyright 2025 Agave Loco Brands Pojoaaukee, Wisconsin. All rights reserved. So you're about to make a trade based on a friend's text, but which u do you listen to is it? We could buy a house in Tulum, get optioning those options. We could lose everything. Or let's do a little research, get your head in the trade and make the investment decision that's right for you. Learn more@finra.org TradeSmart now back to my.
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A
Conversation with Sharon Price. John, president and CEO of Build a Bear. Talk to me, Sharon, a little bit about expanding the addressability of your product through partnerships with brands like Swarovski, which is obviously a premium consumer brand, and then with IP and content with the likes of Ted Lasso.
- [16:42]
B
Yes. So I think you're going to start to see a theme here. Right. So we not only have partnered with different types of licenses to appeal to this broader consumer base. So for a long time, Build a Bear had already had traditional types of kids licenses with whatever the next big animated film is, or an animated episodic, you know, popular, like we have Bluey now for example. But that gave us permission. When we understood the power of this multi generational aspect of the nostalgia economy, we could kind of see this emerging to do things like Ted Lasso and have a little more of an edge in what we do. And we ended up building a microsite called the Bear Cave.
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A
Yes.
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B
Yeah, let's talk about the Bear Cave. So much fun.
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A
Just before you describe it, the section of your website that is called the Bear Cave is intended for 18 plus age 18 plus customers. I literally, Sharon, had visions of bears where you push a button and they swear at you or something like, what makes these R rated. R rated bears like.
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B
Not at all. Not at all.
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A
Explain it. Bring me out of the dark of my imagination.
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B
R rated bears, they're the most. They're the cutest versions of Deadpool you've ever seen.
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A
Oh, there we go. There we go. Okay, perfect.
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B
It's a Deadpool is a Teddy bear.
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A
We should have had this interview over dread. Cause I gotta tell you, there's so.
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B
Many places just a little later in the day.
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A
Irish coffee, which next time we'll do Irish coffee. Let's talk about other kinds of trends that you're seeing because you've got such an interesting vantage point. And let's go back to this concept of nostalgia. And one way in which it's manifesting itself is foot traffic at malls seems to be coming back. And you said that you did not want to just be associated with malls. Build a Bear is a destination in its own right. But as you think about growth, are you looking at malls as a place for resurgence and renewed growth?
- [18:39]
B
Now, we have never been on the bandwagon of mall abandoned mutt. And even when we were going through the mall apocalypse a few years ago, all these great names, you know, global pandemic mall apocalypse, Brexit, whatever, there's always been the good and the bad malls, you know, and we've focused on the much more successful malls with tremendous partners. And we're virtually 100% profitable. So that's inclusive of our mall stores and. But you are right and we are seeing it as well. The post Covid environment has shifted the way people think and shop and the things they want to spend their money on. It seems as if people do want to go back to things of comfort. They would rather spend more money on experiences than things. We happen to be both combined in one and they want to go out and shop and be go to places. It's really interesting when you think about it that right before the global pandemic, right before COVID there were so many predictive indicators and futurists saying, oh, we're just going to all live in our houses and order everything online and malls will be dead in five years and nobody's going to shop. And I think that what's so interesting about that is that the COVID situation almost said, hey, so this is what that feels like if we really do it. And everyone went, I don't really like that.
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It's not for me, it's not for me.
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B
We need to get out and live.
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A
You're chairperson at the Toy association, which is the leading industry trade group. And while I absolutely hear you that perhaps the death of the mall or the mall apocalypse may not have come into fruition, there was a moment in time when it felt as though the specialty toy retail apocalypse was coming. I remember when Toys R Us went bankrupt and I remember those store closures and there was real concern that toys would only be available for in person purchase at Walmart and big box retailers. Build a bear aside, have there been a. Has there been a growth in independent toy retailers? Has there been someone that stepped up to fill that gap? What's going on in terms of destinations broadly for families to go shopping with their kids at.
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B
Yeah, so that's a good question. And there were a lot of different reasons why Toys R Us that weren't necessarily related. There was real estate that they were in. But I think you're asking a really valid question because those specialty retailers, there's a string of them in the toy industry that failed over the course of time all the way back to KB Toys or there was just a number of the Imaginarium. There were a number of them and some of them were mall based as well. But we ended up being sort of the largest specialty toy chain, if you will, left. But you are seeing some destination based FAO Schwarz where we actually have a location, or Hamley's in London, which you know well, which we also have a location so we see those as partnerships. And I, I do believe that people want to get back out in this nostalgic economy. Is that where that sort of the slack, if you will, is being taken up is that different kinds of specialty stores are now carrying toys, particularly plush. Plush is a big category right now. There are brands that have popped up out of nowhere that are, you know, some of them might be more trend based, but the Labubu, very, very trendy. You know, it's, it's, it's a, it's sort of like a darling category, if you will. And I'm not in the business of mentioning competitors, but, you know, I like the idea of all ships rising in that particular area.
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A
Before joining Build A Bear, you were at Hasbro and Mattel and you were VP of the Disney business unit. One director of Barbie, the other. Those are the poster children of, in the case of Disney, taking ip, taking beloved characters and turning them into merchandise. And then Barbie has really set a new precedent of taking the toy and creating this unbelievable film experience, creating content out of it. Has Build A Bear got a plan for creating content out of its IP and going in that direction versus, you know, you've had partnerships with hello Kitty and it's come the other way, right?
- [23:17]
B
No, that's a fabulous question. And I've been so fortunate to work on brands like Barbie and Disney and even at Hasbro on Transformers and My Little Pony, where there is an innate understanding not just of the value of a brand and its stretchability into different categories and the ways to monetize that equity, but also the practical aspect of how to get it done. So one of the biggest insights when I came to Build a Bear was that the brand was strong, but the business was broken. And those are two very different things. We needed to create an efficient and effective business model to monetize this extraordinary equity that was in the brand created by every single one of those heart ceremonies over the course of a decade or so. And so it was a long term. When you ask about the turnaround, it was partially to get the company to come with me on this journey of understanding that we will never get to our biggest value if all we do is think of ourselves as a retailer. And so we went through sort of an education process of the workshop's a place. Build a Bear Workshop is a place. Just think about it. It's just. That's all it is and that's okay. And it's a place where we create great memories and wonderful experiences, but what we've accidentally done with all of those heart ceremonies is accidentally created a powerful brand. The brand is bigger than the place. So we have Build a Bear the brand and our job becomes creating a really efficient vertical retailer. So we just happen to have that as our number one revenue stream. And when you're running that very well, it tends to churn a lot of cash. So vertical retail is a cash flow machine and we then need to build out new verticals. Right. So that's where the international business comes in. That's where you build out E Com. That's where you build out outbound licensing. Because a brand that holds values like friendship and love and customers, you know, sort of this personal experience is extremely powerful. And so how many categories could Build a Bear be relevant in? What could you make that's creative or the build a bearing of a coffee mug? You know, like it's how do I put something together and stretch that out? But also outbound, outbound. So the outbound licensing, selling already pre made stuff, stuffed animals, you don't have to go through the experience. Yeah, I know that from my online sales. So our new mini beans for example, we're going to end up already started to sell that to other retailers. So Build a Bear shows up somewhere else and then finally where you're getting to is the extension of intellectual property with sub brands and co brands. So we have already launched multiple intellectual properties. Honey Girls that has a movie merry mission, also with a feature film. And we're on the verge of launching a new episodic.
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A
Perfect. Yeah, we'll look out for it. And do you think about distribution? Do you have a bias distribution? Does YouTube have an impact on you versus the streamers? How do you feel about that?
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B
We are a bit everywhere on that. So the Honey Girls film, which was a live action film that we did with Sony that was on Netflix and so. But the. The Mary Mission film, we distribute that. We distribute it first in theaters and limited in a limited way and then it was just widely available. And then with this, with our new episodic which you're getting a scoop on this by the way. The new episodic animated series will be on our own YouTube channel.
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A
Oh, they're fantastic. There you go. Distribution in your own YouTube channel. That is a nugget, actually.
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B
Yeah, there's a nugget.
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A
There's a nugget in there.
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B
It's coming. I think the press release is in development. It's been a week.
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A
There we go. There we go. The nugget. I do want to finish Sharon. I could Chat all morning with you. But I do want to finish by talking a bit about the Build a Bear foundation because before we started recording, you were telling me about some work that you've been doing with the first book and you lit up as you talked about it. So just talk a little bit now, if you don't mind, about the Build A Bear foundation and what we'll do.
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B
Thank you. So our founder, Maxine Clark, back in 1997, not only did she have this vision of bringing teddy bears to life for kids, she also wanted to from day one make sure that we were giving back. And that was inclusive of setting up a Build a Bear foundation for the well being of children. And that for us has expanded in recent years to be inclusive of literacy. So we partner with First Book, tremendous organization who makes sure that kids in need and have books of their own. And as we were talking about the data is overwhelming. So of what the importance of literacy and how predictive that is of success of children, of humans. And we did just, it was so heartwarming. We worked with Salesforce. We were at all five of their regional headquarters. We had title one, second graders come in and they built teddy bears and they got their own books and I got to read the story to them. And what we know through research is that why books and bears go together is that kids love to sit with their teddy bears. It helps them improve their reading skills when they can read to their own furry friends. So kind of takes down the anxiety. We were both joking around how neither of us had an issue in getting up in front of a classroom. Yes, I was never shy, but some kids are. It's all woven into both the psychological and the sociological positive aspects of kids having their own furry friends. They learn empathy and caring and friendship all through this. And that's part of the beauty of it. And it was just wonderful when you watch these kids build their bears and get their books and they were so engaged.
- [29:53]
A
Well, it is the holiday season. We talk about the markets, we talk about the money here on the show. But it's, we just don't want to lose sight of the fact that it is the season for giving.
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B
Yes.
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A
And for giving back. So thank you for sharing that with us. Sharon Price John, president and CEO of Build a Bear. You've led a turnaround for a public company. Very few people have done that successfully. You've written a book. Come back, please come back after that press release goes out. And let's talk about how, how that new episodic's going.
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B
I would love that.
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A
Thanks for joining here in studio. Appreciate it. Well, huge thanks to Sharon Price, John, for joining me. What was such a fun conversation? Great energy lighting up the studio today. Well, the markets are wrapping up for the day. So John, match that energy. Tell me, did anything catch your eye?
- [30:33]
C
Yes. Shares in athleisure OG Lululemon Athletica ticker Lulu popped as much as 14% today after reported earnings that beat expectations and the announcement that CEO Calvin McDonald will step down next month.
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A
Well, the stock price on this one down 45% this year. It's been a laggard and there's been real public pressure coming from an incredibly influential voice. That's the founder, Chip Wilson, who has said the company needs to reverse what he calls the company's quote, loss of cool. So there it is, the founder, the brand maker himself saying it's just not got its mojo. That's right.
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C
And two months ago he took out a full page ad in the Wall Street Journal saying the company is, quote, in a nosedive and quote, chasing Wall street at the expense of customers.
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A
Well, in terms of what's next, Lululemon's CFO will act as interim CEO while the board searches for a full time replacement. The chair of the board said the hunt is on for a quote leader with a track record of driving companies through periods of growth and transformation. And as most of the market experienced a sharp selloff throughout the day, there was though one category that saw a lift and that's cannabis stocks. CNBC reported that President Trump is expected to issue an executive order as soon as Monday that would allow for reclassification of marijuana. And the reason this is is it would allow cannabis companies to fall under different tax regulations that could encourage investment or frankly make financing this whole sector a little bit easier.
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C
Stocks responded. Shares in weed producers Tilray Brands and Canopy Growth Both jumped nearly 30% on the report. And cannabis greenhouse operator Innovative Industrial Properties was up over 10%. Related Weed tickers, YOLO, weed and toque were all up to date.
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A
We basically chose the story so that our producer John would have an excuse to roll out some of those funky tickers. But that's it. Fol It's Friday tgif that's it from us today. That's all for Brew Markets Daily.
- [32:20]
C
And Brew Markets Daily is hosted by Anne Barry and produced by John Curto, Targa Bellatief and Emily Milliron. Technical direction by Felicia Edwards. Rosemary Minkler is our audio engineer. And the president of Morning Brew Inc. Is Devin Emery.
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A
Wake up on Monday with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew daily. We'll see you back here next week. Same time, same place. Have a good weekend.
- [32:48]
B
Been out here all morning.
- [32:51]
A
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- [32:59]
B
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- [33:01]
A
Every login, every device, every user stays protected.
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A
Learn more@duo.com.