Build-A-Bear Workshop 2014 Annual Report Download - page 31

enter the comparable store calculation in their thirteenth full month of
operation. Our web store and temporary and seasonal locations are not
included in our comparable store calculations. Non-comparable stores
also result from a store relocation or remodel that results in a significant
change in square footage or temporary closure. The net retail sales for
that location are excluded from comparable store sales calculations
until the thirteenth full month of operation after the date of the change.
We have a loyalty program with a frequent shopper reward feature,
the Stu Fur Stu® club. Members of the program receive one point
for every dollar spent and receive awards after reaching certain point
thresholds. On a quarterly basis, an estimate of the obligation related
to the program, based on actual points, awards outstanding and
historical point conversion and award redemption patterns, is recorded
as an adjustment to the deferred revenue liability and net retail sales.
As the awards can be earned or redeemed at any of our store locations,
we account for changes in the deferred revenue account at the total
company level only. Therefore, when we refer to net retail sales by
location, such as comparable stores or new stores, these amounts do
not include any changes in deferred revenue. See “-Critical Accounting
Estimates” for additional details on the accounting for the deferred
revenue related to our customer loyalty program.
We use net retail sales per square foot and comparable store sales as
performance measures for our business. The following table details net
retail sales per square foot for the periods presented:
(1) Net retail sales per gross square foot in North America represents net retail
sales from stores open throughout the entire period in North America divided by
the total gross square footage of such stores.
(2) Excludes our web stores and temporary and seasonal locations.
(3) Net retail sales per selling square foot in Europe represents net retail sales from
stores open throughout the entire period in Europe divided by the total selling
square footage of such stores.
The percentage increase (or decrease) in comparable store sales for
the periods presented below is as follows:
Fiscal
2014
Fiscal
2013
Fiscal
2012
Comparable store sales change -
North America (%) (1) (2) 1.4%5.7% (2.0)%
Comparable store sales change -
Europe (%) (1) (2) 2.3%2.9%(8.4)%
Comparable store sales change -
Consolidated (%) (1) (2) 1.6%5.1%(3.3)%
(1) Comparable store sales percentage changes are based on net retail sales and
stores are considered comparable beginning in their thirteenth full month of
operation.
(2) Excludes our web stores and temporary and seasonal locations.
Fiscal 2014 consolidated comparable store sales for the full year are
compared to the 53-week period ended January 4, 2014. We believe
the increase in comparable store sales for fiscal 2014 was primarily
driven by:
• High-impact product launches supported by well-executed,
elevated marketing programs which led to robust sales of key
licensed products, continued strength in our core collections and
successful proprietary launches;
• Improvement in key operational levers as we saw increases in
dollars per transaction, units per transaction and average unit
selling price for the year; and
• Strategic store closures, primarily in North American multi-store
markets, which have transferred approximately 15% of their sales
to remaining stores in the market.
• Additionally, we believe fiscal 2014 was negatively impacted by a
decrease in trac partially attributable to the extreme weather
patterns in the first quarter of 2014 in North America and its
lingering eects. In the first quarter of 2014, extreme weather
decreased overall mall trac for many markets in North America
impacting the retail sector overall. In the second quarter of 2014,
we saw the lingering eect of the first quarter weather patterns as
school vacations were cancelled and the school year was extended
in many markets impacting experiential children’s retail such as
ours whose trac benefits when kids are out of school. We believe
that consumer trac in many of the malls in which we operate
stores has decreased from historical levels impacting overall
consumer trac to our stores.
Fiscal 2013 consolidated comparable store sales for the full year
are compared to the 52 week period ended December 29, 2012.
We attribute the increase in comparable store sales for the period
primarily to the impact of our brand marketing and product
strategies which have improved results in our overall store base and
our real estate optimization strategies which have driven sales in
selective markets impacted by store closures and remodels.
• The growth in our base business accounted for approximately 70%
of the overall comparable store sales increases in 2013 which we
believe were driven by:
• A 30% reduction in discounts in North America which
contributed to higher transaction value in 2013; and
• Our brand building marketing initiatives, including national
television advertising in the United States, along with a
balance of proprietary and licensed product, which we
believe increased trac to our stores and contributed to an
increase in transactions.
Fiscal
2014
Fiscal
2013
Fiscal
2012
Net retail sales per gross square foot -
North America (1) (2) $409 $381 $ 350
Net retail sales per selling square foot -
Europe
(2) (3) £567 £525 £511
BUILD-A-BEAR WORKSHOP, INC. 2014 ANNUAL REPORT 19