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Build-A-Bear Stuffs Malls

The growth of Build-A-Bear Workshop sounds more like a warm and fuzzy story than a corporate expansion plan.

The St. Louis-based interactive retail concept (motto: "Where Best Friends Are Made") opened its first make-your-own-teddy-bear store at St. Louis Galleria two years ago. Its 14th store recently opened in Orlando, and 25 new Build-A-Bear Workshops are on the boards for 2000.

"By this time next year, we'll be bi-coastal," says Maxine Clark, founder and chief executive bear. "We're looking at proposals for 2001 already. We think there's room for 300 stores in the United States and many more internationally within the next seven years. Wherever there are families and children, there are reasons to have a teddy bear."

But teddy bears can be bought anywhere, even at gas stations. How is it that Build-A-Bear Workshop thrives in malls with sales of $400 per sq. ft. and more? The secret is in turning stuffed animals into an interactive experience that can be shared among the generations.

Upon entering the store, customers - called Guest Bear Builders - choose a floppy animal body from a selection of mostly bears and several other animals. Then the customers choose a sound chip (oinks and songs like "Take Me Out to the Ball Game" are among the dozen choices), stuff the animal, add a heart, dress the animal and name it.

"It isn't about buying a teddy bear," Clark says, "although we think our teddy bears and kitty cats and bunny rabbits and monkeys are all very cute. It's more about the experience, about the connection that you make, whether it's with your children while they're making it, with your teddy bear while you're making it, or that grandma and grandpa took you out to do something fun at the mall."

The company sends all of its employees to St. Louis for three weeks of training at Bear University. "They learn, obviously, how to build a teddy bear in our environment and use our equipment to stuff the animals. But it's not just about making teddy bears," Clark says. "It's about understanding what we're here to do, which is way deeper than that. We have really special people who work in our stores. We don't advertise; it's one customer telling another. We have a very high repeat business."

One reason customers return is the modest to moderate price points of the animals - which begin at $10 - and Build-A-Bear's extensive selection of outfits and accessories.

"What I've always been interested in is finding products that are stylish and cost-engineering them to put them out at an affordable price," says Clark, who was president of Payless ShoeSource from 1992 to 1996 and has a 25-year career in retail marketing. "I didn't come from a wealthy family, but I never really wanted for anything when I was little. But today, if you don't have something, you're an outsider. Why should that be? I can't even imagine not making (the workshop) affordable for kids."

In choosing new Build-A-Bear sites, Clark looks for high-density population locations and other children's toy and clothing stores as co-tenants. The workshops range from 3,000 to 3,500 sq. ft. The company clusters stores into regions, allowing Clark and her managers to better support them.

"We want to grow our business intelligently," Clark says. "We want to put (workshops) in places that make sense, so we can visit them more frequently. We want to have a company that is eventually big but feels small."

Contact: Mark Zorensky, president and chief executive officer, Hycel Properties, 101 South Hanley Road, Suite 1300, St. Louis, MO 63105-3406; (314) 721-4800.

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