Build-A-Bear Founder Says Retail Must Be 'Fun'
YOUNGSTOWN, Ohio -- Maxine Clark recalls a pivotal moment in her business career. Early in her work as an executive with the May Department Store Co., the company’s CEO at the time, Stanley Goodman, told a gathering. “Retailing is entertainment and the store is a stage. When the customer has fun they spend more money.”
That was advice Clark took to heart years later, when she founded Build-A-Bear Workshop, a retail chain that allows customers to stuff and create their own personalized plush toys. Clark was the featured speaker at Youngstown State University’s Paul J. and Marguerite K. Thomas Colloquium on Free Enterprise last night at Stambaugh Auditorium.
Build-A-Bear opened its first store in 1997. Clark, at age 48, had been in retail for 25 years and was president of Payless ShoeSource Inc. when she decided it wasn’t “fun” anymore. While she was financially successful, she wasn’t enjoying the position, she recalled. Although she didn’t know what her next venture would involve, she did know that fun and connecting with customers would be at the heart of it, she said.
As Clark was deciding what to do next, she was shopping for Beanie Babies with the daughter of a friend. When they couldn’t find what the child wanted, the little girl suggested that they could probably make something like the popular toys as a craft project. “But I heard something different,” she recalled, and set to the task of preparing a business plan and raising capital.
That was during the dot-com boom, when investors were putting their money into technology firms and many experts were predicting the death of brick-and-mortar retail. Clark relied to a large degree on her own money. Then an article about Clark’s plans in the St. Louis Business Journal caught the eye of an investor who put in $4.5 million for a 20% stake in the company.
“At Build-A-Bear Workshop we did not invent the teddy bear. However, Starbucks didn’t invent coffee and Ray Krok and McDonald’s didn’t invent hamburgers. They just invented how to sell more and how to sell it better,” she said. “We put an entirely new spin on the teddy bear business.” Items range from $10 to $25 – down from $35 -- and the average transaction is $35, she said.
The stores are painted yellow, a choice which critics questioned but the color gives them a “signature warmth,” she said. It’s no accident that the international icon for “happy” is a yellow smiley face, she remarked.
Also key to the company's success is its employees. “It’s our associates that create the experience that really is the difference between buying a bear at Target and making a bear with all your heart and soul at Build-A-Bear Workshop,” Clark said. “They do it with a passion beyond anything I could have imagined. I couldn’t have planned for that. You can’t train for it. You just hire people and give them to the tools to do the job.”
Clark's company was named among Fortune magazine’s top 100 best places to work for the fifth consecutive year.
Angel Mingo, assistant manager at Southern Park Mall location who attended the lecture, said she has worked there since the store opened nine years ago. Her first visit to a Build-A-Bear Workshop was when her daughter was 3 years old. “It was phenomenal … how it made my daughter feel, how enjoyable it was,” she said.
“It’s just fun,” said Chris Cunningham, chief workshop manager at the Boardman store.
Build-A-Bear Workshop went public in 2004, and grew to about 400 stores worldwide and about 300 stores in the United States. Business during 2008 to 2011 was “really tough,” Clark acknowledged. Relying on its strong cash reserves, the company used the time during the economic downturn to think about its strategy and make sure it had stores in the right places, determining the chain should go back to about 250 U.S. stores, she said.
The company also “reinvented the concept” to make it more relevant to a generation growing up in the digital era. That includes tying into the popular culture such as superhero films. “And then you also use technology to freshen up the concept,” she added. Using a touch-screen computer, patrons can choose form a multitude of sound selections to download into the “heart” that is then implanted in the plush toy, as opposed to just 16 before.
“If they want a bear singing like Justin Bieber, they can,” she said.
The company also is on track to update 60 of its stores in its new format, including locations in Cleveland and Columbus. The new format stores are trending 30% higher than in third prior configuration, she reported.
Clark described sales at the Boardman store as “steady.” Like the other Ohio stores, it was hurt by the downturn but improved with the rebound of the automobile industry.
About 70% of customers are girls although the split is 50-50 until age 5, Clark said. Sports-themed merchandise associated with professional franchises, superhero characters such as Captain America, Superman and Batman, and construction worker, fire fighter and police officer outfits help attract the boys, as well as the Star Wars characters. Boys also come back as they get older to purchase animals for their girlfriends, mothers and sisters.
The song “Teddy Bear,” recorded by Elvis Presley in the 1950s, “changed the relationship of the teddy bear to adults and teenagers,” she remarked. “It symbolizes love, security, friendship … It’s not old fashioned but yet it is.”
Pointing to several of her own teachers over the years as providing inspiration to her, Clark stepped down as the company’s CEO this year to focus on applying her entrepreneurial skills to public education. The most important factor is talent she said, and teacher pay isn’t high enough to attract top talent to the profession, she said. “In China it’s a coveted position,” she remarked.
As a student journalist, Clark recalled that one of her teachers told her that some of the teachers at the school -- who were mostly women at the time -- made less money than the janitors, despite having master’s degrees and doctorates. An article she subsequently wrote for the school newspaper about the issue eventually won her an award that paid for four years at the University of Georgia.
Clark said she found an “absolutely fantastic” successor to take the company to the next level, CEO Sharon Price John. “She’s going to be a great leader,” she said.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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