Build-A-Bear Workshop 2009 Annual Report Download - page 18

BUILD-A-BEAR WORKSHOP, INC. 2009 FORM 10-K
Third Party Licensing. We have entered into a series of
licensing arrangements with leading manufacturers to develop
a collection of lifestyle Build-A-Bear Workshop branded
products including children’s furniture, fruit snacks, Nintendo®
games, scrapbooking products and craft kits. We believe that
each of these initiatives has the potential to enhance our
brand, raise brand awareness, and drive increased revenues
and profitability. We select companies for licensing
relationships that we believe are leaders in their respective
sectors and that understand and share our strategic vision
for offering guests exciting and interactive merchandise. We
have policies and practices in place intended to ensure that
the products manufactured under the Build-A-Bear Workshop
brand adhere to our quality, value and usability standards.
We have entered into or maintained licensing arrangements
for our branded products with leading manufacturers
including Pulaski Furniture, ConAgra Foods, The Game
Factory, Colorbok and Ellison Educational. Many of our
licensed products include a tie-in with our interactive Web
site, buildabearville.com.
INDUSTRY AND GUEST DEMOGRAPHICS
While Build-A-Bear Workshop offers consumers an interactive
and personalized experience, our tangible product is stuffed
animals, including our flagship product, the teddy bear, a
widely adored stuffed animal for over 100 years. According
to data published by the Toy Industry Association and The
NPD Group, sales of the traditional toy market were $22.2
billion in the United States (excluding video games) in 2008
with plush and doll sales having a combined 20% share of
the traditional toy market. According to further data provided
by The NPD Group, worldwide toy sales topped $71.96
billion dollars in 2007. Build-A-Bear Workshop ranks as the
ninth largest toy retailer for retailers with continuing
operations as published by Playthings Magazine.
Our guests are diverse, spanning broad age ranges and
socio-economic categories. Major guest segments include
families with children, primarily ages three to twelve,
grandparents, aunts and uncles, teen girls who occasionally
bring along their boyfriends and child-centric organizations
looking for interactive entertainment options such as scouting
organizations and schools. Based on information compiled
from our guest database for 2009, the average age of the
recipient of our stuffed animals at the time of purchase is nine
years old and children aged one to fourteen are the recipients
of approximately 80% of our stuffed animals.
According to the United States Census Bureau, in 2006
there were over 60 million children age 14 and under in the
United States. The size of this population group is projected to
remain relatively stable over the next decade. Industry sources
estimate direct spending by children in the United States at
over $50 billion annually and that parents and family
members spend an additional $170 billion annually on
children. In addition, children influence billions of dollars in
other family spending.
EMPLOYEES AND TRAINING
In January 2010, we were recognized by Fortune magazine
for the second consecutive year as one of 100 Best
Companies to Work For. We believe that this honor is the
result of our commitment to providing a great experience for
our diverse team of associates as well as our guests. We have
a distinctive culture that we believe encourages contribution
and collaboration. We take great pride in our culture and
feel it is critical in encouraging creativity, communication,
and strong store performance. All store managers receive
comprehensive training through our Bear University program,
which is designed to promote a friendly and personable
environment in our stores and a consistent experience across
our stores. We extensively train our associates on the bear-
making process and the guest experience. In fiscal 2009, we
hired less than 2% of applicants for store manager positions.
We focus on employing and retaining people who are
friendly and focused on guest service. Our high employee
retention rates contribute to the consistency and quality of
the guest experience. Our store teams are evaluated and
compensated not only on sales results but also the results from
our regular guest satisfaction surveys. Each store has a
recognition fund so that exceptional guest service can be
immediately recognized and rewarded. We are committed to
providing compensation structures that recognize individual
accomplishments as well as overall team success.
As of January 2, 2010, we employed approximately
1,100 full-time and 5,000 part-time employees. We divide
our store base into four geographic regions, with the United
Kingdom, Ireland and France representing one of those
regions. The regions are supervised by our Chief Operations
and Financial Bear and four Regional Workshop Directors.
Bearitory Leaders are responsible for each of our 31
bearitories consisting of on average, 11 stores. Historically,
each of our stores generally has had a full-time Chief
Workshop Manager and one full-time Assistant Workshop
Manager in addition to hourly Bear Builder®associates, most
of whom work part-time. The number of part-time employees
fluctuates depending on our seasonal needs. In addition to
the approximately 5,800 employees at our store locations,
we employ approximately 200 associates in general
administrative functions at our World Bearquarters in
St. Louis, Missouri, approximately 100 associates at our
Bearhouse distribution center in Groveport, Ohio, and
approximately 30 associates in our European Bearquarters
in Windsor, England. We are committed to innovation and
invention and generally have confidentiality agreements
with our employees and consultants. Store managers and
Bearquarters associates pass specific profile assessments.
None of our employees are represented by a labor union,
and we believe our relationship with our employees is good.
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