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We noted on our third quarter call on, December the 5^th based on the midpoint of our range, we would currently expect to see the fourth consecutive year of record results.  Retail Unwrapped is a weekly podcast hosted by Shelley Kohan from The Robin Report. Each episode dives into the latest trends and developments in the retail industry. Join them as they discuss interesting topics and interview industry leaders, keeping you in the loop with everything retail. 

Hi everyone and thanks for joining our weekly podcast. I’m Shelley Kohan. I’m very excited to welcome Sharon Price John, CEO of Build A Bear Workshop. So I am so thrilled to have you on Retail Unwrapped and we’re going to take a little bit of a deep dive into Build-A-Bear Workshop and what you’ve been up to.

So let’s jump right in. Welcome. Thank you so much. I’m excited to be here.  So, what’s interesting is that, coming first thing I want to ask you is, you know, what are you seeing in terms of how consumer behavior has changed over time? What are you seeing out there in the stores?  That’s an excellent question and a really fun one to open with because we are seeing some shifts in consumer behavior since my tenure here even in the last 10 years.

When I first arrived at Build a Bear in 2013,  it was in a post recessionary period and you were seeing a lot of shifts in consumer behavior to being more digitally focused. E commerce was the fastest single growing arm of retail at the time and everyone was. You know, I would come very close to saying, in common vernacular, freaking out about what do you do, you know?

So all of these. coms were popping up with none of the burden of retail and all the retailers are trying to figure out how to get into e comm without completely cannibalizing the retail business. Right. So,  that shift was very hard for a short period of time. And you know what, Shelley, that’s when you saw the mall traffic start to decline.

Right. At like, you know, in over like a five, six period and you guys did a lot of coverage on this Five, six year period decline, like 50%. Some, some estimates were,  and then interestingly, and, you know, and that was called the retail and the mall apocalypse, which, you know, many of us, many of us were saying,  I don’t think it’s an apocalypse.

It might be a resetting, but you know, it’s a little dramatic. But,  and thank goodness we were right, but right for a terrible reason. I think, you know, post COVID, COVID kind of told us a bit about what the retail future would be like if we really did just, live out of our houses all the time. And you know what?

I don’t think we liked it. So in the post COVID environment, you’re like, oh,  I need to get back out. I want to be a part of it, you know, of, of making memories and doing things and being with people. And so you kind of just watch this shift in consumer behavior. And at that juncture, fortunately for Build-A-Bear Workshop, you know, the experiential retail model is now table stakes.

But we’ve been doing it a long, long time, so over 25 years. So that was a long answer, but I think it gives you this sort of this sweeping evolution of what’s happening, and I think we’ll end up in an interesting balance.  Yeah, so what’s interesting is you talk about experiential retail, and it’s a very hot topic right now.

I mean, everyone’s talking about experiential retail, but, you know, Maxine Clark, who founded Build-A-Bear Workshop, I think it was nearly 30 years ago, she’s always talked about experiential retail. So what, so back then, if you look at what experiential shopping environments look like then and what they look like now, what does that change look like?

Well, Build A Bear was a bit of a, you know, standalone in that space. I can’t say that, you know, we invented it in any way, shape, or form, but, you know, we were early on accredited for, sort of the, I would say the translation of it in the modern era.  and I think that it was appropriate that she thought through it from a kid’s perspective because there was a real willingness to want to spend that time.

And then when you add this incredible personalization process of making your own special teddy bear, that, In the mind of the child literally comes to life during the stuffing process. And then there’s the heart ceremony. It’s just an excellent way to think about the best of,  translations for something like that.

And while it has become, as I noted, table stakes,  there are different ways to do it. And if you really break it down,  every retail is an experience. Just, is it a good one or is it,  is it memorable in the right way or memorable in the wrong way?  you know, and there’s lots of, you have to think about that, which.

I think bodes well, not only for the consumer, because it’s a higher level of expected engagement, but it also bodes well for our, our, like for us, our amazing bear builders, because there’s a different skill set. It makes the day go faster. They enjoy their day faster because they’re in, they’re interconnecting  with our guests.

At the end of the day,  I think it’s more about  not just being transactional. It’s being interactional.  and, and that’s, that’s the standard we’re going to be held to. And, and if you just want to click fast and move in and move out, you go online to do that, if you want to get out and create a memory and take some selfies.

You go to a place where you’re going to have a great time.  That’s so true. And I have to tell you, speaking of great memories. So I took my son there, I swear it was 10 years ago. We had the best, I swear we were there for like an hour and a half. He’s very meticulous, you know, so he wanted to, like, make sure, and it’s one of my fondest memories of his childhood, just not, just the whole process, watching him make decisions, watching him decide, you know, this or that, what type of animal, what are they going to wear?

I mean, it was an amazing experience. So that’s still 10 years later, top of mind when I look back on, you know, my son’s,  You know, what was important in relationship building with him and I, that was a big one there. It was just so fun that day. You know what? There’s so many stories. Well, there’s almost 250  million, Build A Bears that have been, you know, created over the course of time at this point.

And, and there’s 250 million stories that go along with those. And it’s one of my great pleasures, if not honors, to hear those stories.  and thank you for sharing that. So, what’s interesting about what you’re saying is, sometimes our bear builders have to, this talk about experiential retail, have to sort of coach the, the caregiver.

To allow the child to go through the experience and not tell them what to do and sort of remind them what you knew extinct instinctually is you let them be who they are. Let them let you’re going to learn a lot about them today. If you let them be who they are, that clearly doesn’t have to take an hour and a half.

It can be much shorter than that. But,  that’s just wonderful that you shared that. Now, the shift to is that when you are an experiential retailer like Build A Bear, and you are making these indelible marking moments, marking these moments in time,  Your son, who now is probably over 20, maybe 20 years old.

Seven. He’s 17. Yeah. So,  you know, there’s going to be a moment where,  it’s, it’s exciting for him to revisit that. And, you know, we’re starting to see already that multigenerationality  and not just people coming back and collecting products or, you know, getting involved in some of what we call mashups.

With other brands that they love, like Harry Potter.  but you know, a little bit older, they’re already having their own kids. And, you know, now 40 percent of our sales are to teens and adults.  Wow. That’s amazing. Good for you. I love that. Well, it was important because, and this comes back to this balance between.

The, the physical retail footprint and management of e commerce.  When we recognized, and it was a little bit harder as an experiential retailer to make the,  really strong decision that we had to participate in the digital economy. We don’t really have this choice with growing at the rate that it’s growing, but the how to participate in it was a different question.

Because if you’re known for something, So poignant,  and it’s very difficult to stretch that experience into a, you know, online transaction. You’re afraid you’ll undermine the power of your brand. Right? But the, the, the insight was. That we had this moment in time when we really started to lean into that with the older consumer.

The experience was something that they had already had, and that’s what endeared them to the brand. So that was a very stretchable halo. And we focused on gift giving collectibles and trend products.  where you just really want to do a quick, you know, click through and make it frictionless as possible and all of these licenses.

And we even created a micro site called the bear cave. So we could put licenses like  Deadpool bear and matrix bear. Oh, and that’s what unlocked this entirely separate piece of business for us. Because we wanted to make sure that we were honoring and preserving the part of our business that is still the primary way someone,  first learns about Build-A-Bear Workshop but, that we didn’t want to cannibalize the business.

So they’re very bifurcated now,  in that we over indexed with that older consumer online and clearly over indexed with families with children in the stores.  I love that. That’s great. And I love how your story was. Oh, my gosh, is the online going to kill us? And actually, you found this whole new, you know, avenue of, you know, revenue, but also, you know, making a greater contribution to more generations.

Yeah, I mean, Shelley, the truth is like every single time there’s been some, what seemed to be threatening or in some cases insurmountable, you know, mountain, it’s the questions that you ask it. And like, you have to craft those questions in a way that you can come up with a. A viable solution. Sometimes it’s not, will we, will we participate in the digital economy?

It’s, you know, and then you’re like, yes. And it’s like, okay, let’s do it. Let’s get somebody and build a site. It’s how, how to, how to participate where it optimizes. The potential of the company. Right. And it’s the same thing that happened when the malls started to contract. It’s like, okay, you know, we,  this physical piece of our business is so important.

We had,  I would  hate to tell you how many people just from outside, whether a random investor, occasional this person or that, why don’t you just shut down all your retail and you’re like, Oh, if I have to deal with this, that’s like, right, first of all,  yeah, do the math on the lease liability. But anyway, but the second piece and that should do it.

But the second piece is because that is why we are who we are. How do you think. We built all of this equity. That’s not the answer. And we’re like, but you know, maybe malls are not the answer either anymore. At least the only answer, because we, you know, wildly were, you know, most of our stores were in the early days, all about malls and that’s a very common way to, to build a retail business in the eight and nineties.

Right. You just roll out, right. It’s you just roll out with the malls and you have this footprint and you, every time there’s a new mall open, you’re just, you’re just, you kind of in the, you know, the mix and you know, all the guys and you just, that’s just what you keep doing and that’s how you grow. And that’s how you project yourself.

But we’re like, well, maybe that’s not what we should do anymore. And people, but we have to change the strategy. And it hit us one day that no,  really what the strategy was,  When Maxine started the company back in 1997, to your point earlier, it’s, she wanted us to be where families go for fun and entertainment.

That’s it. They just translated that into a mall because that was the answer. And so the truth is we’re not changing the strategy. We’re changing the tactic. So that insight drove us to do quadrant analysis and back into a lot of data to determine where the stores that were doing well.  What they were doing, where were they, what did they have in common?

Very traditional approach to this, but we, it was harder for us to see the connections because some of the places were malls and some of them weren’t in this and that, and we had 20 percent of our sale or if our stores were unproductive, unproductive and,  unprofitable.  but what emerged was that they were all in tourist locations.

Whether that was called a mall or not called a mall, where 50 percent or more of the sales were to people 50 miles or more away.  And that unleashed an entirely new strategy for us of hospitality destinations and tourist destinations. That’s why we ended up on Carnival Cruise Lines. That’s why we ended up partnering with Great Wolf Lodge.

That’s why we ended up partnering with Gaylord Hotel  because of this insight. And we over indexed on almost every key metric. And it’s just an interesting journey because it really wasn’t a strategic change. It was a tactical change. And realizing how the consumer had shifted and what they did when they were seeking fun and entertainment as a family.

I love that. And, since you brought up your leadership choices and decisions, I have to, I love your book. Thank you. Stories and Hearts. And, so it’s great because you talk a lot about leadership there, but you also talk, talk about your own career. And it’s, I love the way you wrote it because it’s more, it’s like a stories.

So first, let me ask you, why’d you write the book? And then secondarily, who were you trying to reach in that book?  Yeah, well, I primarily wrote the book because Forbes called me  and it made me think about, and look, I had thought about if I ever wrote a book, what would it be? Because when you do as much public speaking and when you’re engaged with different groups, a lot of people are like, yeah, you should write a book.

You should write a book. So you can’t help but sort of contemplate, you know, what that would be. But I never wanted to write a book, quote unquote, about me. I wanted to write a book about you. You know, and when I say you, I mean, the greater you like what, you know, you’ve done so much Shelley too. I mean, at some point you have to say, would anything that you know now have been helpful to you 20 years ago?

And I know you’re going to say, yes, you know, you’re probably going to laugh.  Wow. What would I say to myself  if you could talk to yourself 20 or 30 years ago? And that, that was the impetus.  I’m like, and then I thought back through some of the stories that had impacted my life and what I was thinking at the time where  a lot of people may have made one choice, but I made another choice and it made me dig into the research about it.

So, you know, I did, there’s the stories, and then there’s this sort of contemplation of the story from a statistical and psychological perspective. And then there’s the, you know, there’s these insights that I asked the reader to sort of think about their own life and how you might,  Shift your mindset because  the entire book is really about unlocking the power of your personal stories to create a life you love and  the thing for me was that  so much of that sounds like trite, but the truth of the matter is you just stories that you play in your head.

Predict your future.  So true. And the stories that you play in your head may or may not be true.  Just trust me on this.  That data is overwhelming. That 60 65 percent of what we think are facts At least that’s, they’re not true when you go back and look at it. You’re just something that you’re creating in your own mind about who you are, what you did, why this, particularly on the why this happened.

You never know why something happens. You don’t know what other people are thinking. And if you would just pause on anything that’s happening in your life and replay that story in a way, That is empowering to you versus disempowering to you. It literally can change your life. It’s that simple.  and when so much of what we replay in our heads, isn’t true anyway, you might as well make up stuff that works.

I love the journey. I mean, if you think about it while you’re in it, so while you were going through all these things in your career, you, you, you probably weren’t as reflective about why you chose this or why you chose that. So the journey now looking back and then having to, well, why did I make that choice?

Why did I, I think that’s a, I think everyone should do that,  when they in their career at some point is to go back and say, why did I make that decision? You know, that’s that was that was really inspired by a fairly famous steve jobs quote Of you cannot connect the dot looking forward  But you can looking back and that’s what we need to share with people I mean the the other piece of that was That I see now on social media, the,  the misinterpretation of what young folks think is the storyline to success because everything’s so scrubbed up and everything looks so perfect and every, and I’m not saying that the people that are sharing these stories are. Are, are not being truthful, but they are leaving out stuff.  It’s not, yeah, I mean, there, there’s a loose, loose trajectory, but there it’s probably like this.

And if we don’t share that, I think there’s so many amazing, talented, driven young people that will think the minute something doesn’t go right. It’s the minute, some kind of sign that they’re not going to be successful when  So far from the truth. It is that moment that will propel you if your mind is in the right place.

I love that. The other thing I love about the book, and many people may not know this, is you actually do not receive any direct proceeds from the sale of the book. I think that’s amazing, and so I believe the money goes to a charity Build-A-Bear Workshop founded, which is focused on child literacy and the well being of children.

That is true. It is true. It’s the Build A Bear Foundation that Maxine set up years ago, and  we have, quite a few of our corporate values are, you know, about giving and learning and, and things, you know, that, so we,  we set that up or she did, and we’ve continued that tradition. It’s really important to us, and on our 25th anniversary, because of Maxine’s passion about,  early childhood literacy, we actually expanded the mission of the foundation to include that, and we have such wonderful relationships, and one of the biggest ones in that is the, with First Book,  who provides,  books to underprivileged kids.

So, it’s a, it’s a wonderful thing for us to be able to do that. That’s great. Now, before we move off the book, I want to know what is your favorite chapter? And I’m going to tell you, I, I couldn’t get to one, so I picked two favorites. Goals and function and grit and growth. Those are my two favorite chapters, but what’s your favorite chapter?

Look, so just like,  all the chapters are from like some section or funny thing that popped out in my life, you know, and they’re loosely chronological.  it’s just like when people ask me, where’s the, where’s the best place you’ve ever lived? Cause you know, I’ve lived lots of places. I’m like the place that I was at the time.

I got it. I’m going to steal that from you. Is that okay?  That’s true. I mean, there’s no better place in my opinion to have been in. Manhattan in my 20s and L. A. in my 30s and, you know, it’s like, it’s just getting better than that. So, and then raising my kids in St. Louis, right? So, you know, in the Midwest.

But, you know, and I think that that’s also a little bit back to,  the stories that you tell yourself, you know, why wouldn’t it be, why wouldn’t it be the place that I was at the time? So I, There’s pieces and parts of every single one. I mean, this was a labor of love. I literally, I really did write it.

I didn’t have a ghostwriter. I really did do this. I really recorded it.  if you go online and listen to the book, it’s my, my voice.  and, so it was kind of fun, but  I guess the one that I, and I go back to some of this in my own mind, because I feel like I have to live the book that I wrote, because I get off the path too, it’s not hard.

We all do, yeah.  I’m in, right now, I’m kind of reliving this idea of picking your path.  because look, you know, I’m, I just had a milestone birthday and, you know, you’re just, yeah, I’m alive and you’re thinking through things and my kids that were in recent empty masters. And just because I was picking the path at that juncture in my life, that was in my 30s, you know, that, that straight or scenic and allowing.

Just allowing.  At some juncture, you have to just allow, allow more, versus trying to fight through it all the time.  and I’m, I’m trying to allow more and, and let that, that scenic path unwind and enjoy it.  I love that. That’s great. thank you for sharing that. so you’ve been CEO for over 10 years.

I can’t believe it. You’ve grown the business tremendously. I think there’s over 400 workshops and you mentioned you’ve sold over 200. There’s over 500 workshops. Just coming up on it. Right. Right. Yeah. And. You’ve sold over 200 and did I hear that right? 250 million. Yeah, right at it. Not quite coming up on that.

Yep. So,  yeah. And so that was a part of our, strategy that we, unveiled a few years ago. It’s a three pronged strategy of the evolution and expansion of the footprint. So, and that evolution piece is from a business model perspective or a square footage perspective, or, you know, where, whether we’re in hospitality location.

I mean, we have so many iterations now where it used to be more cookie cutter, which was the tradition at the time of the launch. And we’ve just now started to expand more aggressively geographically. We had kind of wrapped that up before COVID and of course had to shut it down.  but we just launched in six new countries in the last quarter and are now in, in 20 countries.

And so I know fun, right? And six new countries in one in the last quarter. Yeah. And so the Maxine always said a teddy bear hug was understood in every language, but we haven’t really tested that tenant yet to the degree that I think we can.  so, and that’s with these business models of corporately operated.

As well as partner operated and then franchise. So there’s, you know, different types of,  capital investment and, you know, that required. so we have cap light as well as our, our own stores in a traditional manner.  but that’s been an exciting, experience. Part of our evolution. And then  the, the, the second tenant is the,  acceleration of the digital transformation, which we’ve, that journey’s never going to end.

That’s what I’ve decided because when we think we’re getting to the end, something pops up like AI and we’re like, Oh, here we go again. Whole new thing, you know, how are we going to  completely  envelop that into everything that we do. So I think that’s going to stay on there for  ever.  and then the third is the continued investment into new areas and new revenue streams.

Sort of while simultaneously returning capital directly to our shareholders. So,  that’s been, what we’re doing and so far so good. We noted on our third quarter call on, December the 5th that we,  based on the midpoint of our range, we would currently expect to see the fourth consecutive year of record results.

Congratulations. That is just unbelievable. I’m so proud of you and all the work you’re doing. And I love the fact that you’re, you’re giving back a lot. And to me, that is really the sign of a great leader. And it’s very appreciative for the industry. You’re a great role model for our industry. So thank you.

Well, I, you know, that I, Maxine was a great role model for the industry.  I’m a steward.  and, and I, and I’m so fortunate to Have been,  been placed in this situation and it, some of it has been easy and some of it has been hard. and you know, but that’s part of life, right? You sign up for some things and you don’t sign up for the others.

I think that,  success comes in the part that you didn’t sign up for.  Now you react to that. Yeah.  Well, thank you so much. And thank you for spending time with us today. It’s greatly appreciated. I know our listeners will certainly learn a lot. And I’m going to encourage all of our listeners to go out and buy your book because it’s amazing.

And they can make a contribution to the Build A Bear Foundation.  while they’re reading your book. So,  thank you very much. And, I’m sure we’ll talk soon in the new year.  Thank you for listening to Retail Unwrapped. We’ll be back in one week with another podcast. Please subscribe on Apple Podcasts, Spotify, or any podcast service.

If you have questions, ideas for a podcast, or anything else, please contact us via therobinreport.com.