BULLISH ON BEARS
By Carol Schwab
Following
the advice of kids is one of Build-A-Bear founder Maxine Clark's
secrets to success. In fact, she's received some of her greatest
encouragement from a former colleague's children, Katie Burkhardt,
13, and Jack Burkhardt, 10, whom she fondly refers to as two of
her "best friends."
Clark,
50, recalls first telling the youngsters her idea for a make-it-yourself-stuffed-animal
store. "They loved the idea and wanted to help me with it."
Clark
further formalized her channels to children, establishing a board
of 20 children, ranging in age from six to 14 years old, who in
the bear spirit, serve on a "cub" advisory board.
Incorporating
many of their ideas, she founded Build-A-Bear Workshop™
in October 1997, creating an innovative retail
store that features a stuffed animal-making assembly line. Guest
"bear builders" select the furry animal they want to make, choose
the sound the creature will utter and then stuff, stitch, fluff,
name, and dress their new friends. The entire process takes approximately
20 minutes,
depending upon whether or not the store is crowed. Bears typically
cost between $10 and $18.
Above:
At this stop in the Build-A-Bear assembly line, "Hear Me,"
children listen to the different sound possibilities before selecting
the one they want their furry friends to make.
Build-A-Bear
has expanded from one store at the Saint Louis Galleria, (now
the smallest store), to 14 stores. This year 25 more are planned
to open, coast-to-coast. By 2007, Clark
expects to have more than 250 Workshops nationwide.
With
respect to the St. Louis region, Clark plans to add a store in
St. Clair Square in Southwestern Illinois next year.
In
just two-plus years, Build-A-Bear has succeeded in becoming one
of the nation's largest retailers of teddy bears through mall
stores, direct mail and the Internet. In 1999, this private company
had close to $20 million in sales.
But
that doesn't tell the whole story, Clark emphasizes. What really
matters to her is the smiles on her young customers' faces.
"I
had no idea she'd be this successful," admits Paul Cahn, chairman
of Elan Polo, and Build-A-Bear supplier of a line of custom-made
stuffed animal shoes. "I was confident
she'd succeed at anything she put her mind to, just not to this
extent."
Clark
says Cahn was an early supporter, though rather conservative.
Yet she valued his cautious nature and found it to be a good balance
to her aggressiveness. Cahn has worked with Clark for more than
10 years, first establishing a business relationship while she
was executive vice president of Venture and then later as president
of Payless Shoes, a $2.3 billion chain of 4,500 shoe stores then
owned by The May Company.
"She's
a very eager person, fair and great to work with," Cahn adds.
"We're one of her admirers."
Cahn,
who has served on the board of directors of Enterprise Bank for
nine years, introduced Clark to the institution's Chairman and
CEO Fred Eller.
"We
do all of her banking for her," Eller says. "We're lucky to be
associated with her. She's a great businessperson and a genuinely
nice person. "She's been successful in everything she's done;
she did unbelievably well prior to Build-A-Bear."
In
the three-plus years that Clark was president of the discount
shoe store, Payless' market share of all shoes sold in the United
States grew from 16 percent to 20 percent, and the number of Payless
Kids stores increased from 2 to 750. She developed the retailer
into the number one
seller of children's licensed footwear in the world.
Clark
began her 25-year career in retail in 1972 as an executive trainee
at May's Hecht division. The Coral Gables, Fla., native was transferred
to St. Louis by The May Company in 1976 and worked in a
variety of
capacities at May corporate headquarters, Famous-Barr, Venture
and lastly Payless Shoes.
The
experience she acquired while at The May Company has proven to
be invaluable in starting her own business, she says. "I have
taken everything I know and applied it to teddy bears."
Above:
At this stop "bear builders" register and name their
new creations.
She
continues to add to this knowledge. One of the most critical things
I have learned is the importance of a store's location." She says
the mantra "location, location, location," certainly applies here.
"We've
had the best results by choosing malls where people really shop,
not necessarily where the customers live," she explains. "Also,
we target malls that serve as community centers, because they
hold numerous events and activities that draw crowds."
In
terms of sales volume, Clark looks for malls that average $450
to $500 per square foot annually. (Clark's sales are in excess
of $700 per square foot).
She
says the Saint Louis Galleria is the gold standard in many
respects. It
is a community center, centrally located within the region, clean,
quick to respond to problems, secure, and well planned with respect
to spacing of bathrooms and telephones. Plus, it has a good balance
of different kinds of retailers and has an excellent selection
of food for employees on break.
Above:
Guest "bear builder," Emily Schaeffler hugs her new furry
friend that she made herself.
Specifically,
the Build-A-Bear store is centrally located within the mall, in
a main artery where traffic converges, near an entrance and across
from an activity center. She also likes the fact that two children's
stores are right next door.
Feelings
are mutual. The Saint Louis Galleria is just as pleased to have
them in their mall as Build-A-Bear is to be there. Mark Zorensky,
president of Hycel Properties Co., property manager of the Saint
Louis Galleria says, "We try to provide a complete tenant mix
and she rounds that out. She brings something to
the table that
shoppers can't get anywhere else. And most importantly, her store
attracts people to the mall that wouldn't otherwise come here."
Good
location in conjunction with a good concept equals success. Success
seems to run in the family. Her husband, Bob Fox, is also an entrepreneur,
having founded Newspace Inc., in 1984, a company that specializes
in building home offices and family entertainment centers, and
organizing closet space. They met while working at Venture, Fox,
was a merchandise manager at the time and Clark was an executive
vice president of marketing and merchandising. Fox, a native St.
Louisan whose father was president of International Retail Shoe
Company in the 1960s married Clark in 1984. "He's my knight in
shining armor," she says.
Fox
has been a great help to Clark. "I first started Build-A-Bear
out of our home, and when we eventually needed office space, he
gave me space in his office so our overhead was very low. We have
just outgrown his space and are expanding later this spring."
Fox
also gave advice in organizing her stores. "We had a company that
specializes in retail design build our store, but the layout wasn't
always convenient, so my husband came in and made some suggestions,
particularly at the check out area and in the back room. The changes
worked and now all of our stores are built like this from the
beginning."
Clark
says their businesses "are like one big family. We hold our company
Christmas parties together."
In
revenue, Build-A-Bear is larger, but in profit, Newspace wins
out.
Clark
started the company with $750,000 of her own savings and later
received more than $11.4 million in venture capital, which she
has used and continues to use to open stores.
"There
was an article about Build-A-Bear in the newspaper and Barney
Ebsworth with Windsor Capital, saw it and called me, saying he
wanted to invest in the company," she states. "His call changed
our destiny and has taken us to the next level." The other partners,
Walnut Capital and Kansas City Equity Partners, followed.
Clark
explains that there are other stores that allow customers to create
stuffed animals, but they don't seem to understand the magic.
It's
more than just making a stuffed animal, it's personalizing one
and adding value to a product. When someone buys a bear, the purchase
includes a storybook or a birth certificate and cardboard home,
called a Cub Condo®. The birth certificate enrolls
the customer in the Find-A-Bear® program, which
allows a lost stuffed animal to be returned to its owner.
Other
reasons customers may return are to buy clothes or accessories
for their stuffed animals (there are even eye glasses), to have
a birthday party or to get a new Cub Condo. Bears account for
60 percent of the assortment and other animals and items make
up the rest.
She
stays in touch with customers through a newsletter entitled, "Beary-Newsworthy,"
which keeps customers up-to-date on store happenings and provides
interesting facts about bears and their history. She also talks
to many of her customers via e-mail. She says she receives 500
to 700 e-mails a day, half of which are from kids.
"They
ask the greatest questions," she says. "I've made a lot of friends
by answering e-mails. It's the most fun I have all day." Clark
responds to all of them herself, often at night. "They help me
with my work, they'll tell me the best malls in their area or
one person told me the colors of their high school, so our sports
outfits could match."
Clark
explains that she learns not only from her customers but her sales
associates also known as Master Bear Builders.
In
return, she spends a lot of time training her associates, who
go through a three-week training program at "Bear University."
Because
Clark is confident in this program, she has no qualms about hiring
people without experience. Plus she says to succeed in the job,
it simply takes caring for customers and making them happy.
Many
of our employees look at this as a career, not just a job. She
explains that her staff of 1,200 full- and part-time employees
(45 of whom are in St. Louis), "are glad to work in a place where
they receive 'psychic income.' Retail may not pay top dollar,
but there is a lot of satisfaction here. One of my marks of success
is having our associates grow with the business and move up the
chain."
In
addition to her responsibilities as "Chief Executive Bear," Clark
is on the board of directors of the Girl Scout Council of Greater
St. Louis and the board of trustees of her alma mater, the University
of Georgia. She also serves on the boards of Tandy Brands Accessories,
Department 56 and The Earthgrains Co.
"We're
delighted to have her on our board," says Barry Berracha, chairman
and CEO of The Earthgrains Co. "She is a very dynamic executive
who is customer and consumer focused. She is a people person."
Since
Build-A-Bear Workshop's debut, the accolades have poured in both
locally and nationally. Build-A-Bear was named "Best New Retail
Concept for 1998" by Chain Store Age magazine and received
a 1998 merchandise Achievement Award for "Best Category Marketing"
from Playthings Magazine, a publication of the toy Manufacturers
of America. In addition, Discount Store News called her
one of the "30 Most Powerful People in Discount Store Retailing."
In
1999, Ernst & Young in St. Louis named Clark Entrepreneur
Of The Year in the Emerging Business Category. Arthur Andersen
awarded the Workshop with the 1999 Global Best Practices Award
for Exceeding Customer Expectations. In addition, Clark was given
the distinction of "Top Women Business Owners" in 1999 by St.
Louis Small Business Monthly. And, most recently, she was
named by the St. Louis Business Journal as one of "100
Leaders for the Millennium."
In
a very short time, Clark clearly has developed a reputation as
an industry innovator. She has made it happen. "I believe in it,"
she says. "I love shoes, clothing and stuffed animals. I have
been able to turn all my favorite things into a great business
that is fun for us and for our Guests."
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