Build-A-Bear Workshop 2011 Annual Report Download - page 27

BUILD-A-BEAR WORKSHOP, INC. 2011 FORM 10-K
Our certificate of incorporation and bylaws and Delaware law
contain provisions that may prevent or frustrate attempts to
replace or remove our current management by our
stockholders, even if such replacement or removal may be in
our stockholders’ best interests.
Our basic corporate documents and Delaware law contain
provisions that might enable our management to resist a
takeover. These provisions:
• restrict various types of business combinations with
significant stockholders;
• provide for a classified board of directors;
• limit the right of stockholders to remove directors or
change the size of the board of directors;
• limit the right of stockholders to fill vacancies on the
board of directors;
• limit the right of stockholders to act by written consent
and to call a special meeting of stockholders or propose
other actions;
• require a higher percentage of stockholders than would
otherwise be required to amend, alter, change or repeal
our bylaws and certain provisions of our certificate of
incorporation; and
• authorize the issuance of preferred stock with any voting
rights, dividend rights, conversion privileges, redemption
rights and liquidation rights and other rights,
preferences, privileges, powers, qualifications,
limitations or restrictions as may be specified by our
board of directors.
These provisions may:
• discourage, delay or prevent a change in the control
of our company or a change in our management,
even if such change may be in the best interests of
our stockholders;
• adversely affect the voting power of holders of common
stock; and
• limit the price that investors might be willing to pay in the
future for shares of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
STORES
As of December 31, 2011, we operated 288 retail stores
located primarily in major malls throughout the United States,
Canada and Puerto Rico, 56 stores located in the
United Kingdom and two stores in Ireland in our Retail
segment. Our North American mall-based stores generally
range in size from approximately 2,000 to 4,000 gross
square feet and average approximately 2,800 square feet,
while our tourist location stores currently range up to
7,000 square feet and our flagship store in New York City is
approximately 20,000 square feet. Our UK stores range in
size from approximately 800 to 2,300 selling square feet and
average approximately 1,500 square feet. Our stores are
highly visual and colorful featuring a teddy bear theme and
larger than life details including a “sentry bear” at the front
entry, custom-designed fixtures as well as a customized
Build-A-Bear Workshop tile logo in our entryway. Our stores
are designed to be open and inviting so that guests can fully
immerse in the shopping experience and actively participate
in the creation and customization of their purchase. Our
typical store features one or two stuffing machines, three to
five Name Me computer stations and numerous displays of
fully-dressed stuffed animals throughout the store. We select
malls and make site selections within the mall based upon
demographic analysis, market research, site visits and mall
dynamics as well as a proprietary forecasting model that
projects a potential location’s first year sales. We have
identified additional target sites that meet our criteria for new
stores in new and existing markets. We seek to locate our
mall-based stores in areas with maximum customer traffic,
often near to or in the center of the mall, as well as offering
adjacencies to other children, teen and family retailers.
We lease all of our store locations. Due to our attraction
as a family-oriented entertainment destination concept, we
have received numerous requests from mall owners and
developers to locate a Build-A-Bear Workshop store in their
malls. We believe that we generally have negotiated favorable
lease terms including provisions providing for exclusivity of
operation of our concept in the mall. Our stores are located in
a variety of shopping center types. As of December 31, 2011,
the distribution of our stores is as follows:
Super regional center 214
Regional center 88
Open air lifestyle center 17
Outlet center(1) 10
Other (theme, NYC, concession) 17
Total company-owned stores 346
Temporary locations 6
Other (ballparks, zoo) 4
Total company-owned retail locations 356
(1) Build-A-Bear Workshop stores in outlet centers are not merchandised with
outlet merchandise.
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