Build-A-Bear Workshop 2013 Annual Report Download - page 30

Our long term store real estate goal is to improve our stores’
sales productivity and profitability. We currently intend to close
approximately 10 to 15 locations in 2014, primarily in North America.
We also intend to strategically refresh and upgrade stores with select
features from the new store design, while driving down the cost of
capital required for these improvements. We also expect to open new
locations selectively as opportunities arise.
Non-traditional Store Locations: As of December 28, 2013, we had
one location each in a ballpark, a zoo, a science center and an airport.
Additionally, we had three locations located within other retailers’
stores. We also operate temporary stores, which generally have lease
terms of six to eighteen months and are excluded from our traditional
store count. These locations are intended to capitalize on short-term
opportunities in specific locations. As of December 28, 2013, we
operated seven temporary stores.
International Franchise Locations: Our first franchisee location was
opened in November 2003. All franchised stores have similar signage,
store layout and merchandise characteristics to our company-owned
stores. The number of international, franchised stores opened and
closed for the periods presented below are summarized as follows:
As of December 28, 2013, we had 12 master franchise agreements,
which typically grant franchise rights for a particular country
or group of countries, covering an aggregate of 16 countries. The
distribution of stores among these countries is as follows:
(1) Gulf States agreement includes Kuwait, Bahrain, Qatar, Oman and the United
Arab Emirates
In the ordinary course of business, we anticipate signing additional
master franchise agreements in the future and terminating
other such agreements. We believe there is a market potential for
approximately 300 international stores outside of the United States,
Canada, the United Kingdom and Ireland, which we expect to be
operated primarily by new and existing franchisees.
Results of Operations
2013 Overview
Our 2013 performance demonstrated progress on our turnaround
plan and our objective to achieve sustainable, profitable growth as
we hired a new chief executive, executed a significant real estate
strategy and implemented stringent cost controls throughout the
organization. Our accomplishments included:
• Consolidated comparable store sales increased by 5.1%, led by a
5.7% increase in North America;
• Improved North American store productivity to $381 per square
foot, a 9% increase, reversing a multi-year decline; and
• We expanded retail gross margin and reduced selling, general
and administrative expenses both in dollars and as a percent of
revenue.
In fiscal 2014, we expect to continue to build on these successes,
reposition our marketing programs, including our loyalty program,
and begin to lay the groundwork to further leverage the strength of
our Build-A-Bear brand.
The following table sets forth, for the periods indicated, selected
statement of operations data expressed as a percentage of total
revenues, except where otherwise indicated. Percentages will not
total due to cost of merchandise sold being expressed as a percentage
of net retail sales and commercial revenue and immaterial rounding:
Fiscal Year
2013 2012 2011
Beginning of period 91 79 63
Opened 10 17 19
Closed (15)(5)(3)
End of period 86 91 79
Germany .......................................................................................................................... 24
Australia .......................................................................................................................... 17
Mexico .............................................................................................................................. 11
Denmark ........................................................................................................................... 7
Gulf States (1) ..................................................................................................................... 6
Thailand ...........................................................................................................................6
Japan .................................................................................................................................5
South Africa ...................................................................................................................... 5
Singapore .......................................................................................................................... 2
Sweden ............................................................................................................................... 2
Norway .............................................................................................................................. 1
Total .............................................................................................................................86
20 BUILD -A- BEAR WORKSHOP, INC. 2013 FORM 10 -K