Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week, we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICE's exchanges around the world. Now, let's go Inside the ICE House. Here's your host, Lance Glinn.
Lance Glinn:
The experiential retail industry has reshaped the traditional shopping model by emphasizing immersive, interactive, and personalized experiences that forge deeper connections between brands and consumers. Unlike conventional retail, which centers on straightforward transactions, experiential retail focuses on creating memorable, emotional engagements that enhance the customer journey. This shift has been fueled by evolving consumer expectations as shoppers increasingly seek meaningful interactions and entertainment alongside their purchases. The rise of digital shopping has further accelerated this trend, compelling brick and mortar retailers to differentiate themselves by offering in-store experiences that cannot be duplicated online.
Build-A-Bear Workshop, that's NYSE ticker symbol BBW, has been a trailblazer in experiential retail since its launch in 1997. The company transformed the industry by allowing customers to design and personalize their own stuffed animals, combining creativity, storytelling, and emotional connection into a unique shopping experience. This approach has made Build-a-Bear a beloved destination for families and a standout brand in the retail landscape.
Since taking the helm as president and CEO over a decade ago, Sharon Price John, today's guest inside the ICE House, has guided Build-a-Bear through numerous challenges, steering the brand toward continued success. With a wealth of experience from her leadership roles at Stride Rite, Hasbro, and Mattel, Sharon has led the company through major obstacles such as the COVID-19 pandemic, Brexit, and the decline of the American mall. She joins us to reflect on her career at Build-a-Bear, share insights on how the company has evolved to meet ever-changing consumer demands, and offer a glimpse into what lies ahead as the brand approaches 2025. Our conversation with Sharon Price John, President and CEO of Build-a-Bear, is coming up right after this.
Speaker 3:
Innovation is the wild ride, the challenge, the dream, the chaos. When change is needed, but the path is unclear, it's time to redefine your perspective. That's where the fun begins. Shift the paradigm. See the world through the lens of potential. Challenge becomes innovation. Dream turns to design. Chaos emerges as clarity. Let's transform business together.
Lance Glinn:
Welcome back. Remember to subscribe wherever you listen, and rate and review us on Apple Podcasts so that others know where to find us. You can also find full video episodes of the Inside the ICE House podcast on tv.nyc.com and on the NYC YouTube channel.
Our guest today, Sharon Price John, has been President and CEO of Build-A-Bear Workshop, that's NYSE ticker symbol BBW, since 2013. Over the last decade plus, she has led the company through a financial turnaround while expanding the brand in addition to repositioning and evolving Build-A-Bear for its present and future success. Before assuming her current role, Sharon was present of the Stride Rite Children's Group and spent time in various roles at Hasbro and Mattel. Sharon, thanks so much for joining us Inside the ICE House.
Sharon Price John:
Thank you. Appreciate it.
Lance Glinn:
So when you think of Build-A-Bear, what comes to mind for so many is the physical product that's brought home, that physical bear, the stuffed animal that a child gets that they have for years and years to come. But the company-client interaction is so much more than just the end result. How would you describe what Build-A-Bear is and what it provides to the customer more than just what they walk out with at the end?
Sharon Price John:
Yeah, that's a really great question because so much of what we believe is the underlying value, in some ways the untapped value of Build-A-Bear still after over 25 years is the relationship that we create with our guests. And that is usually founded in the fact that they're not just an exchange of a bear for legal tender. It's more of an experience.
The stores were founded on that concept, of the ability for, in that time a child, not so much anymore, but a child to be able to come in and make their own very special, furry friend, whether that was a teddy bear or a bunny or any other kind of stuffed animal, and to go through that process. When you watch a child go through this, or particularly when a parent or a caregiver is able to experience it with their own child, it's very special because there's an empowerment aspect to it, you're creating memories, there's specific moments that you never forget.
Whether it's choosing the product, stuffing the product, making a wish, going through the heart ceremony, dressing it exactly like they want, they really feel like, one, that that stuffed animal, that furry friend is theirs. They chose it. They created it. It's, again, an incredibly empowering and a creative experience and very memorable. I'll just add one point is that, as much as I know and I knew this brand had a high brand awareness coming in and it was a beloved, the how beloved has been surprising and delightful to me even after being here over a decade. There's not a moment when I am out and someone knows who I am or finds out who I am that they don't feel compelled to share some story about Build-A-Bear, whether it was their first time at Build-A-Bear, their Child's first time, the anticipation of going to Build-A-Bear for some event. I've never worked on a brand like that, and I've worked on almost-
Lance Glinn:
On many of them.
Sharon Price John:
... a really wide variety of children's brands in my life.
Lance Glinn:
You mentioned the memories. Build-A-Bear really does build memories. And for me personally, as we were previously talking about before we started recording, I'm expecting my first in March and I can't wait for the memories I'm going to build at Build-A-Bear. We all sort of have our own growing up with our children, with ourselves, building that bear. Do you have any that particularly stand out, whether it's while leading the company or before you were part of it?
Sharon Price John:
Well, as much as it bemoans me to note this, I was not a child when Build-A-Bear was started, but I do have three children, and each one of them have had multiple wonderful Build-A-Bear experiences prior to me working at Build-A-Bear. My oldest, who's turning 26 or just turned 26, had her sixth birthday party at a Build-A-Bear. My other two of course have their favorite Build-A-Bears and I still know their names, Excited Ears the Puppy, and Pink Stars the Unicorn. And we've kept them. They do not go in a big bag somewhere in the basement, they're a very, very special part of our family.
Lance Glinn:
So Build-A-Bear this year celebrated its 20th as a public company listing here on the New York Stock Exchange under the ticker symbol BBW. It's a milestone that not all companies reach and a real testament to the success that the brand has attained over the last two decades and even before that. What does this accomplishment mean and how does it feel for you to be leading Build-A-Bear during this really celebratory time?
Sharon Price John:
Well, I think that that milestone has to be a moment of acknowledgement of the founder, Maxine Clark, who not only in 1997 envisioned this concept and opened the first store in the Galleria Mall in St. Louis and to a surprise success beyond her imagination and chased it to the point that they were able to have an IPO 20 years ago now. But she took it through that portion of the journey very successfully and had such a big idea about the vision of experiential retail, which by the way now is almost table stakes for any sort of physical retail. We're widely considered one of the bellwethers of that entire concept.
So I am so appreciative of Maxine trusting and believing and giving me the reins to this company now over 10 years ago. My part of the journey's a different part of the journey. It's been in a publicly-traded company position ever since I arrived, and that's been a little bit of a bumpy road for us. I mean, you mentioned on the lead-in that it was a financial turnaround, and indeed it was. So as much as I love coming to the New York Stock Exchange, it wasn't always fun reporting, but we got there.
Lance Glinn:
And we love having you here. I know Build-A-Bear, really a staple around the exchange year after year after year, especially when we come around the holiday seasons. And I'm so glad that you are back here in 2024 and I'm sure for the years to come as well. So, Build-A-Bear, you joined in 2013 as President and CEO. I mentioned before your long career in the children's toy industry, I guess you could put it. What first attracted you to this position? How were you first introduced to this opportunity and what made you say, "This is the one I want to pursue. This is the right position and the right brand for me."?
Sharon Price John:
I had met Maxine prior to interviewing for Build-A-Bear. She's such a dynamic, energetic, brilliant woman. It's hard to believe that anyone could ever forget meeting Maxine. So that was an indelible memory for me to have met her. And yes, I had already spent multiple decades in the toy industry, whether that was at Mattel or VTech or Hasbro. Actually ran the US toy division in Hasbro and then decided to shift industries for a moment into the fashion footwear vertical retail space. So it's just fascinating in some ways that Build-A-Bear is almost the only company where everything I've ever done...
Lance Glinn:
Blends together.
Sharon Price John:
... was going to be put to work. And it's also fascinating that that last move, which I had a lot of trepidation about leaving this industry that I'd been in for so long, and even though there were some transferable skillsets of still of it was about kids, but I didn't know vertical retail.
Lance Glinn:
Which is different.
Sharon Price John:
Hasbro and Mattel, it's a different way to do business. So that little piece of the puzzle somehow made me oddly the snowflake that they were looking for. They contacted me, and I love the brand, and I love experiential retail, I'm a marketer at heart. I started in the advertising industry here in New York City years and years ago. So to be able to pull from all of those different experiences and with that dynamic vision and the support of the founder, even though I know knew it was going to be difficult, it was an unprofitable endeavor at the time and had been contracting for about eight years, some of the things that you could see in the metrics were not dissimilar to some of the challenges that Stride Right retail had had. And we had had a very successful run in the three years that I was there turning that around very quickly and returning to positive comps.
So I thought that there was a real path. The brand fit was easy. It was, "Can I do it?" was the question. Can't do it alone, I had to bring some folks with me. But that answer, at least in this moment, was we did have a strong runway and a real possibility to build the brand to an entirely new level.
Lance Glinn:
So reflecting on those initial days in 2013, you get the opportunity to sit at this new desk, look over this new company that you'll be leading. What were some of the initial challenges that come to mind? What were some of the initial moments and I guess sectors that you looked at and said, "This needs to be fixed. This needs to be changed. We need to turn this around so that Build-A-Bear can once again be successful and once again be on the right side moving forward."?
Sharon Price John:
There's something that's really interesting about that, and I encourage people to do this if they ever want to be a CEO. There's only a few routes, and if it's a successful endeavor, you're probably an heir apparent. And if it's an unsuccessful endeavor, you better learn to be a turnaround agent. Because usually that's where CEO opportunities open up, something's not going right. It doesn't open up when everything's going right. So if you learn to be a turnaround agent, you're increasing your odds of having a CEO position open up for you. Of course, there's categorical specificity, but that in a general way is something to think about if that's your objective.
Now, that being said, often when these types of roles open up, it's not that they hadn't been trying to correct it for some period of time. One of my favorite questions from an investor environment is, so what was the silver bullet? Well, here's the kicker on that. Usually by the time you're asked to come fix something, whether it's a brand or a business unit, and that's where I learned how to do this not as a CEO, there is no silver bullet. It's not something obvious. What you have to be is a student of every single link of the value chain, just a strong understanding of how each one of those value chains are created, what's happening, where the money usually hides, how to read that spreadsheet, how to direct people, where to poke. And you learn a lot about that. So once you have that sort of mastery of being able to basically look at a spreadsheet and say, "There's your problem. There's your problem. There's your problem. There's your problem," and where to dig in and counsel and guide the team, it's difficult.
And that's what I did right out of the gate. It was finding those pennies on every link instead of, "Oh, there's your obvious issue." One of the things that was changing that you may have thought was an obvious issue would've been the shifting consumer shopping patterns, were the contraction of malls. But in each situation like that, there's usually an opportunity. Whether you're running a tight ship is in your control. Whether consumer shopping habits are changing is outside of your control, but from chaos is opportunity, from challenge is opportunity, from change is opportunity. All of that activity is what led us to diversify our retail footprint, to rethink how we ran our stores, how big did they need to be, the driving of e-commerce and the bifurcation of the addressable consumer by saying, "Look, we're now multi-generational." I don't have to just be about kids. I can create a robust online business without cannibalizing my stores, without undermining the core point of difference, which is experiential retail, to focus on licensing, collectibles for this teen and tween consumer, which is now 40% of our business.
Lance Glinn:
You bring up malls. And it's just a simple fact, there is a correlation between Build-A-Bear and malls. When a lot of people think of Build-A-Bear and where they're located, the first thought will go to, "Oh, I went to my local mall and that's where I got my first bear or that's where I had my birthday party." So with that decline of malls in the early-2010s, mid-2010s range, how did you go about addressing that challenge? How did you go about changing the business model of sorts to understand what's happening? But then, like you said, when change come, when challenge comes, opportunity comes along with it.
Sharon Price John:
Yeah, so definitely malls were starting to contract, not as many malls were opening, some malls were starting to actually close at that point. We'd already been through the recession. This would've been a little bit of a slot between the coming out of that 2008/9/10 recessionary period, before what was then called the mall apocalypse. So we're right in that little center spot where we did our quadrant analysis. We tried to understand what are the underlying dynamics of where we work and where we don't. Because not every store was unprofitable. When I arrived, 20% of the stores were unprofitable and our four wall was 9%. Now 100% of our stores were profitable and our four walls about 25%.
But that is a systematic process, and the first thing you have to do is understand what's making you successful and what's making you unsuccessful and what are the dynamics of those locations. And so we dug into that. When we let the data show us that path, one of the most interesting things that popped out of that data, which you might look at now and say, "Oh, it's so obvious," which is what usually happens, but if it was so obvious, why didn't [inaudible 00:18:57]-
Lance Glinn:
Well, hindsight's 20/20, you know?
Sharon Price John:
Right. Was that we over-indexed on almost every key metric in a tourist location. The challenge of why it was hard to see that is that every tourist location isn't called a tourist location, right?
Lance Glinn:
Yes.
Sharon Price John:
It's like tourist location A. Turns out where every mall, it's called a mall, but some malls are tourist locations and some tourist locations are not malls. So that was a big aha moment for us to focus on tourist locations where we would over-index on almost every key metric. And when you think about the consumer psychographic behind that, the psychology of the open wallet, this is the best memory, the best souvenir possible for this location, it not only caused us to want to open stores in more and more tourist locations, we started to make more location-specific product associated with being able to celebrate the fact that you were in New York City, for example.
Lance Glinn:
I wish I could say that the mall decline, mall apocalypse in that time period was the only challenge that was faced over the last 10-plus years, but we know it wasn't. We all faced the challenges of the COVID-19 pandemic not that long ago, four or five years ago at this point. I would think for an experiential retail brand like yourself that brought a whole host of challenges because for so long you weren't able to go in person, you weren't able to have that same experience that Build-A-Bear is so synonymous with. So how did you adapt the business model to deal with this unanticipated, unexpected challenge that arise really so quickly over the course of a couple months in 2020 when you had to deal with, I'm sure, store closures, obviously distancing restrictions, economic hardships both for the consumer as well as for employees as well. How do you or how did you deal with all of these, again, unexpected, unanticipated challenges that really sort of sprouted out at the beginning of 2020?
Sharon Price John:
Yeah, so everyone did deal with it in different ways obviously, but when you are a vertical retailer, back to that construct, we indeed did shut down 100% of our stores around the globe in a 48-hour period. There's not a playbook for that. And then we laid off 90% of our team across the globe. So those are very difficult times. The interesting piece of it though is, if we go back to the previous story of you have to look at challenges as opportunities, when we had done that before, we decided to build up an omnichannel business and diversify our consumer base and addressable market. So that had led us to having a very strong e-commerce business with all the tools in place to do e-commerce at a level that we heretofore would had not even been able to operate. I mean, it would've been impossible. We were operating at such a low level because it was not an important piece of our business. It over that time period had become an important part of our business.
And because we had that channel, it was literally we had a separate channel now that did not require being in person. So we were able to keep that open. We have our warehouse in Ohio where we fulfill our e-commerce, and we were able to appropriately distance and put people on different shifts and manage all of that. So, we shifted 100% online and had some very exciting products that were in the pipeline, namely the child, baby Yoda, that we had anticipated that based on some rumblings that there were some challenges, we didn't quite understand what this situation was, but we're communicating with some of our factories and we decided in a pretty late date to not ship the child to stores and leave Grogu, which is his official name, in our warehouses. Very late date to decide to do that. Meaning that that inventory, this really valuable inventory for this super hot product did not get trapped out at the retail level basically in the 11th hour.
If you think about long-range planning of recognizing, again, when challenges create opportunity, so what can I do here to build this business? And then being ear to the ground on, "This doesn't seem right. Just pause. Everybody, just stop. Let's go through everything that we touch, everything that we're doing with what-if scenarios way ahead of the game," and then saying, "All right, guys, we're shifting to online. This is our lifeblood. We're going to do this and do this well." Interestingly, when you also think about the challenges to opportunities, we were having meetings every single morning at 8:00 AM, like on Friday, Saturday, Sunday, Monday, like every weekends, every day, because the information is coming at you so fast and it's imperfect, confusing, changes from day to day, what you can do, can't do. It was really-
Lance Glinn:
And it was region-specific.
Sharon Price John:
Oh my goodness, oh yeah, region down to sometimes store, municipality, and we're trying to manage all of that. We were calling them the COVID calls, and one day I got on the phone with the team, I'm like, "That's it, we're not calling this a COVID call anymore. I can't call this a COVID call. It's not a COVID call, this is a success call. We are in the business of talking to each other about how we're going to not survive this, how we're going to thrive through this." And they're like, "Oh, what are you talking about?" And I'm like, "Literally, look, there's so much that we've been pipelining that we never get to because of, and take this in the right way, the burden of running hundreds of retail stores around the world every day." Something's always breaking. You got four or 500 stores somewhere, you're just always, "Oh, this is on fire, this is on fire, this is on fire. And so all of these plans that you think you have on the list of things you never get to, let's do everything we never get to."
Most of that was tech stuff. We even did some organizational work. We did a lot of stuff that we knew we needed to do, we just could not justify getting to it. It was really telling about a year later after we popped out of that COVID and then we've had now with our expectation for 2024 what we believe is going to be the fourth record year in a row. One of our leads in our tech area was like, "Sharon, I don't know if you realize, we pulled over a year's worth of pipelining into 2020 because of that focus." And that shifted us to being able to buy online, ship from store, buy online, pick up from store. I mean, the last bits and pieces of being able to build some more infrastructure around what we're currently pipelining, the unlock of omnichannel, personalization, AI, all of that groundwork was built in 2020, bleeding into 2021 a little bit.
Lance Glinn:
Well, as we've talked about, like you said, challenges create opportunities, and clearly that COVID-19 created the opportunity to get ahead and, like you said, to unlock those pipelines that you haven't had just enough time to deal with when everything was running as usual, you have the opportunity to do it during COVID and obviously took advantage of that time. And through all these challenges, Build-A-Bear under your leadership has gone through these evolutions that have allowed it to remain successful. You just mentioned that for fiscal 2024 the company expects to achieve its fourth consecutive record year for revenues. What over the last four years has really driven this great success and allowed Build-A-Bear to overcome the obstacles we've talked about and then thrive?
Sharon Price John:
Well, we believe that Build-A-Bear is more of a brand than a retailer. So there's a fundamental shift in the concept of Build-A-Bear Workshop is a place, but Build-A-Bear is a feeling. And a feeling is stretchable, particularly if the feeling is good memories, friends, fun. Those are really resonant constructs that can be applied across multiple dimensions of product categories and consumers and geographies.
So, our founder, back to Maxine, used to say, "A bear hug is understood in every language," but we really haven't tested the construct of how many languages we can share that bear hug. So we started out on a process of, one, shifting, again, thinking about that Build-A-Bear Workshop had been a vertical retailer that almost accidentally built a brand. We needed to pivot this to a branded intellectual property company that just happens to have vertical retail as one of its revenue streams. When you think about it like that, all of a sudden your mind blows up, and when you start doing that, you start diversifying, which is part of why we've been able to survive and thrive. Even though diversification keeps you from being so focused, maybe your media is pushed around a little more, particularly when it's consumer diversification, but that's also a protection of unknown future when you have more diversified revenue streams.
So we then built out our vertical retail, and we've built retail in multiple ways, partner operated, corporate operated, franchised. We've now gone from a little over 500 stores in the past few years to 600 stores, and that's through with our partners being shopping shops, different formats. That didn't exist before. And now the moves that we've made in the last few months, we're now in 20 countries, six in the last quarter. So that global expansion is a more places concept. Some of the things that I'd spoken about to you before is a more people concept, the expansion of the addressable market, understanding that we're not just that one-time rite of passage for a child. We are, again, a collectible. We bring things back from the vault now that you may have had when you were a kid that people won again. We create viral products on TikTok. We drive some of those trends, not just follow some of those trends. So that entire business is new and diversified for us.
Outbound licensing is another way to think about it. So if Build-A-Bear means these things, what other near-end categories can you brand with Build-A-Bear? So we're building an outbound licensing arm, entertainment also, when you mean fun, great memories, experience, warmth, whatever, that's a really good tool to extend the brand. So we have Build-A-Bear Entertainment that makes... In fact, our Merry Mission product, which is our staple for the holiday season, we launched an animated feature film last year that's now the bedrock of our marketing campaign. So we have Glisten and the Merry Mission that's based on a multi-year successful holiday collection where the characters come to life in an animated feature. And we use that as a marketing tool for us each holiday season. So you can see how we're living up to that original vision of it's not just a workshop, it's not just a place, it's a feeling.
Lance Glinn:
I want to pivot real quick to innovation. There has been really no greater innovation over the last couple of years than the... not necessarily invention because it hasn't been invented over the last couple of years, but the mass integration of AI. It's really hit every sector, every business, no matter what industry there is. Is Build-A-Bear implementing AI, is it integrating AI into what it does, whether that's on the back end or potentially even on the more customer-facing end?
Sharon Price John:
Yes. Well, we have to. That would be no different from a decade ago we're just not going to get into e-comm.
Lance Glinn:
Look, it's there and you have to.
Sharon Price John:
We're just going to ignore the digital economy.
Lance Glinn:
It's such a big part of the world now that even if it's just a back end use, I feel like it has to be implemented some way somehow.
Sharon Price John:
And so the key there, at least from our perspective, is first the mastery to the degree that's possible because it's changing so rapidly. AI to be more efficient, more effective, to elevate the things that people do that might have otherwise been mundane, that can range across a number of different functional areas of the company, from finance all the way to writing the descriptions on our website or predictive indices on which email needs to go to whom or what kind of discount I want to give this person or what's that next deal. All of that fits into the omnichannel construct and building the golden record where we know where our consumers are, what they're purchasing, and how we can engage with them in the right way. AI does a lot of that.
AI also, already we're running that on our website. It helps predict products that are popping to the top, serve them up to the right guests that's there. That's all happening. We also use AI in some of our product development just to spark ideas. You can literally just say in AI, "Hey, a Build-A-Bear... " just make up anything, and it'll spit something out and you're like, "Huh, that's interesting." And then we take it to the designers and make it our own tweak and they use it for thought starters. It's really remarkable what can be done there.
But of course, the big unlock, and we may get to this point, is how to use it in products. The reason we would not want to be probably first to market or a fast mover in that is there's safety concerns around that particularly with children and how much can you create the safe-
Lance Glinn:
Absolutely.
Sharon Price John:
... a safe environment. You don't know what's listening, what's not, how much it's learning. And so we would want to make sure that if we created something in that realm because of who we are and the trust that we have earned an honor with our guests, that it would be worthy of us looking into something like that.
Lance Glinn:
And I think that's what makes this AI mass integration and mass implementation both exciting and scary at the same time. Because-
Sharon Price John:
That's correct.
Lance Glinn:
... there are those obvious benefits of it, as you just discussed, but there obviously are risks associated with it as well. And on the topic of innovation, I have you here, I have to talk about some products, the recent launch of Mini Beans.
Sharon Price John:
Yeah.
Lance Glinn:
I'd love to discuss more of that because, as we talked about earlier, I have a daughter on the way and I know we're going to make our own Build-A-Bear memories and Mini Beans very well may be a part of those Build-A-Bear memories. How was this idea sprouted? And just overall when it comes to product innovation, what is the process of coming up with a new product and then ultimately getting it to market?
Sharon Price John:
I'll start with the latter. Because we have different kinds of consumers, we generally start with some slots and rationale about this consumer, this consumer, this consumer. Then this trend, this trend, this trend, this color palette. It's almost like I've done in every toy company. That's not that dissimilar.
And then usually in a toy industry, for us as well, there's a question of scalability. I mean by scalability, I don't mean financially, I mean do we want to make big ones, do we make little ones? That's a pretty common approach to what people do when they get a hit. So we go through that process, and then our licenses, we enjoy best-in-class licenses with entertainment companies we're just so fortunate, whether it's Sanrio with Hello Kitty or Disney across their entire portfolio or Warner. I mean, we then filter through what's the big films, what's the evergreens and how do we want to make products from that you might enjoy this.
And sometimes there's an entire discussion with these license partners of, do we want to make a replica of whatever character it is or do we make a Build-A-Bearized-
Lance Glinn:
Version of it.
Sharon Price John:
... version of this.
Lance Glinn:
Got it.
Sharon Price John:
That's an entire separate discussion, which is really fun. And sometimes we end up with things like, what it's a Darth Vader bear?
Lance Glinn:
Build-A-Bear, yes.
Sharon Price John:
It's not really Darth Vader at all. When you think about the character of Darth Vader, the fact that we put him in Build-A-Bear but we made him a bear, it makes it a lighter story. It just makes it kid-appropriate. But we have a lot of fun doing that and fans love that.
And then we go through this process of, what are these trend items? Where are these natural PR-able events or how many media impressions do we think that might generate? Which we generate a ridiculous amount of media impressions. So that's kind of some of the-
Lance Glinn:
The process behind it.
Sharon Price John:
... things. Of course, it's a lot more scientific than that-
Lance Glinn:
Of course.
Sharon Price John:
... but I'm just giving you some ideas.
Lance Glinn:
Of course.
Sharon Price John:
But in that concept of collectability, we're kind of big to collect. Just think through this, right?
Lance Glinn:
I mean, the collectibles industry as a whole has grown substantially-
Sharon Price John:
It's ridiculous.
Lance Glinn:
... no matter what you're collecting. Really since the pandemic, the collectibles industry has ballooned.
Sharon Price John:
You're exactly right. We believe, and this has been documented to some degree, that it can be a return to things of comfort, fun memories of childhood-
Lance Glinn:
Nostalgia.
Sharon Price John:
... nostalgia, getting back in touch with things like that, and we fit right in there, right?
Lance Glinn:
Mm-hmm.
Sharon Price John:
So while a lot of people collect our Build-A-Bears, and it might be in the Pokemon realm or sometimes our Hello Kitty realm, sometimes just our own product, we wanted to give people a different type of option for collectability. These mini sizes are more collectible. And so that was one of the things that we wanted to learn by doing this.
Now, we've had something called Build-A-Bear Buddies for a while, but they're bigger than the Mini Beans and they're more just a stuffed animal takedown instead of this floppy format. We just felt like that there was probably, particularly if we made them, many of them are the same version of our most successful traditional make-your-own nears. So the problem we were trying to solve was, how can we increase collectability? Would that drive incrementality or will it be a trade down? We had a lot of those questions.
We also, in this whole idea of being a wholesale company where we make licensed products that are sold to other companies or big box or anything else, we wanted to see if people would be interested in an already-made plush, and we wanted to prove it out in our own stores before talking to somebody else about it. So those were some of the things that were feeding this idea. So we launched them in February and we expect to sell over a million units this year.
Lance Glinn:
Wow, that's incredible.
Sharon Price John:
I humbly think it worked.
Lance Glinn:
Yeah, I would say so. I would definitely say so.
Sharon Price John:
And our sales are up, so it clearly didn't-
Lance Glinn:
I would definitely say so.
Sharon Price John:
People clearly didn't trade down.
Lance Glinn:
I would definitely say so. Now, Build-A-Bear over the last year or so had two additions to the team... or few additions to the team I should say, but two of them specifically. One in October, the company appointed Kim Utlaut as Chief Brand Officer to help lead the continued evolution of Build-A-Bear and its communication strategies. How will Kim and her expertise, excuse me, help accomplish the goals and objectives set out for what is left of this year and obviously 2025 and beyond?
Sharon Price John:
First, we are incredibly excited to have Kim. With her Coca Cola partnership background, she understands the value of brands as well as how to monetize equity in brands. Coca Cola is a perfect example of a brand like that. We have so much of the infrastructure in place, but we're still a little splintered in the way we're operating. You have your e-comm team and your store team and the marketers for this consumer or the people that are doing that, or the TikTok people doing this over there. To really, really create as much value as possible, you have to have an integrated approach. We talked about that earlier. It wouldn't have been as critical if we hadn't diversified, but the mastery of integrating and elevating your entire communications from PR to whatever individual email might be addressed to Lance based on what he just purchased with his young daughter, the tip and tail of how you master that is going to be one of the bigger unlocks that we have in the future.
Lance Glinn:
And before that, in September, Build-A-Bear announced the hiring of David Henderson as new Chief Revenue Officer. How has his appointment benefited the company since his arrival a few months ago? And like the question with Kim, how will he help the company achieve its missions and goals in the years to come?
Sharon Price John:
Dave had been the Chief Commercial Officer at Melissa & Doug, another toy company, and he worked at Hasbro for a long time in successive roles and been very successful in understanding and recognizing how to drive revenue, thus his title. He has the store operations under him, and for the first time at the C level, we're putting the stores and the e-commerce operations together. He's had experience in both of those areas.
That is also an ecosystem that has to be optimized. Many companies put e-comm elsewhere. Sometimes it's into a marketing person. Sometimes it reports into technology. But we really want to push that together because what we have found is, even though from an exact exchange perspective that commerce part of buildabear.com is often the older consumer, it has to be, but it's more for the older consumer too in that it's a collectible, it's a gifting product, it's a this or this. But just for clarification, buildabear.com is not just e-commerce, it's also communication. A big portion of the 50 million people that come to buildabear.com every year are looking for a store, are planning a trip, are planning a birthday party. So it's like the in-between. It's the big unlock.
Understanding, again, that entire ecosystem and how it works and not pitting them against each other, which is what ends up happening in different companies when you don't recognize the natural integrated nature and the way consumers think about it, is I think a really important future state for an omnichannel organization. Or will you ever be omnichannel until you do that, or is it just words?
Lance Glinn:
So Sharon, as we begin to wrap up, obviously we're approaching 2025. Build-A-Bear over the last four years, and really since you started, has had great success. As you look forward to the next 365 days and beyond, how are you plotting out the future to make sure that that success continues and that 10, 15, 20 years down the line Build-A-Bear is still as strong as ever?
Sharon Price John:
That's one of the most important things that I can do right now having been here over a decade, is making sure, and again, also reflective of some of the new hires and some of my amazing team, whether it's Voin Todorovich, the CFO who's been with me for the vast majority of that time, or Chris Hurt, who is a long time chief operations officer, is making sure that we're building the right pipeline and the right strategic approach to assure that I can hand this on at some point in the future as Maxine did. I mean, that's how companies stay on the stock exchange for so many and many years. It's not just about the now, it is about the future.
We believe, based on our continued success and our ability to drive profitable growth even in some economic turmoil, that our strategy is right. And the power of the brand is really there, and still, the brand is bigger than the company. There's a lot of equity in there that's built every day. We've sold almost 250 million Build-A-Bears now across the years, across the world, and every single one of those are moments and events and memories that are special to someone, and everything about that is equity. It's such a rich brand, and it leads back to the three strategies that we have been implementing that have continued to drive that success. One is the evolution of our retail footprint. New places, new approaches, new business models, new geographies, we have a lot of opportunity ahead of us. It sounds like a lot of countries, 20 countries, but there's a lot more countries than that. Just being a little facetious, but there's still a lot of space for Build-A-Bear to succeed even from a footprint.
The second is the acceleration of our digital transformation. I've mentioned it a lot today, mostly in the construct of omnichannel, but it's everything. It's AI. It's how can you become more efficient with putting in new processes, keeping up to date, keeping up to speed, working with our technology teams to even improve our internal communications. It's how do you simplify things so you're spending more money, more time, more effort on the right things that are driving value.
The third is the investment in some of these new revenue streams that are integrating, not something separate or different or distinct, something that's integrating although it's still diversified. And we have continued to return value to shareholders through dividends and special dividends and recently an announced quarterly dividend and share buybacks, which we've been very aggressive for a company our size.
Lance Glinn:
Absolutely. Look, Build-A-Bear has had so much success since your start as president and CEO. It has made so many memories for so many people. I can't wait to create new memories with my daughter when she's born and bring her to Build-A-Bear for the first time to create her favorite stuffed animal. Thank you very much for joining us here at the New York Stock Exchange, and thank you so much for joining us Inside the ICE House.
Sharon Price John:
Thank you, Lance, and I can't wait for you to send me the photos.
Lance Glinn:
Absolutely. Thank you, Sharon.
Speaker 1:
That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen. And follow us on X at ICE House Podcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House.
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
