Build-A-Bear Workshop's CEO on Balancing Tradition With Reinvention

Welcome to Total Retail Talks, your podcast channel for retail knowledge. Hello and welcome to this episode of Total Retail Talks. I'm Joe Keenan, the editor-in-chief of Total Retail, and I'm pleased to be joined today by the CEO of Build-A-Bear Workshop, Chris Hurt. Chris and I are going to talk a little bit about his tenure at Build-A-Bear Workshop, the turnaround that that business has experienced in recent years, and a little bit about some of the exciting things that are to come from Build-A-Bear in the near future.

So, Chris, this is a great opportunity to talk with you, and welcome to the show. Yeah, Joe, thank you very much. I really appreciate you having me on, and I look forward to talking about all the exciting things that are happening at Build-A-Bear. Yeah, I'm looking forward to it.

So to get us started, I think most everyone in the audience knows Build-A-Bear. I'd like to learn a little bit more about my guests, too, as well. and you're a veteran of the company. You've been with Build-A-Bear for nearly 12 years.

Tell me a little bit about your tenure and kind of what about the organization has made you want to be a part of it for such a long run. Yeah, no, thanks, Joe. I've been in the retail world for a long period of time and it's been great. Sometimes people ask me, you know, oh my gosh, I can't believe you've been in retail for so long.

And you know, what keeps you there? And I will tell you, it's fun. I've had a really exciting career, started with Polo Ralph Lauren and then American Eagle Outfitters and had an opportunity to come to Build-A-Bear. And it really was about the growth of the company.

I really saw an opportunity for this brand to expand and be able to be this multi-generational brand, to be able to do the things that we've been able to accomplish over the last decade. I mean, time goes fast when you're having fun, Joe. And I will tell you, that's been exciting. But I came in and really, it was a turnaround at that time.

Sharon Price John had come in as the CEO and built a team to really, A, get our stores and our real estate portfolio profitable. It was really to have sustained profitable growth and drive the brand. We knew we had a powerful brand and the brand needed to be able to grow and be able to be monetized. And we did that through more people, more places and more occasions.

So get the stores really in a great place. People loved going to the stores. We had great teams in the stores, But we also have to be able to have our business metrics correct and be able to move through there. So be able to deliver this experience in a way that drives a company both from a revenue and a profit side.

And then it was to really grow. Then you have all the things that happen throughout the course of retail. We had retail apocalypse where people thought every mall was going to close. And then you have COVID and all kinds of things.

So my tenure, I then went into real estate. So I've overseen the real estate for the company. also recently into brand and merchandising. So it's been tremendous.

And the one thing that's happened over the last couple of years is our international growth. We've doubled our countries in the last two years, which has been really exciting. So what you think about when you join an organization, you never know exactly how that journey is going to be, but it's been really fun. And the growth of the company is the reason I came to Build-A-Bear, along with just the ability every day to get up and think about adding a little more heart to life, our mission, what's happening in our stores.

Our heart ceremony is just tremendous. And we've now done some math that somewhere around the world, a heart ceremony is happening every three seconds. So I love to wake up in the middle of the night and think about that going down. It's really been exciting.

Yeah, it's really been a great story. You noted that Sharon Price John was the CEO, and then you've since taken over that role. You're actually only, correct me if I'm wrong, the third CEO in Build-A-Bear's history. That's nearly 30 years.

So can you talk about, as you think about the brand, you mentioned kind of this powerful brand. What is it about that legacy that's most important in your mind to preserve for your customers? Yeah, Joey, it is kind of, when you think back, we're almost 30 years old. It was a founder-led company, Maxine Clark, with her first store right here in St.

Louis at the Galleria Mall and how it's expanded over this time. So I am humbled and honored to now be the CEO of this incredible brand. But what's important and at the cornerstone of the brand is really, it was really one of the first retail attainment. The word is used everywhere now and all companies and brands are trying to have some form of retail attainment, whether that's through activations or events or things that are going on.

But we get to live that every single day in our stores. So it really is that experience of coming in, making memories, that special moment with either your friends, your mom, your dad, grandma, grandpa, aunt, uncle. And then, you know, as we move into collectors, collectors love to come in and experience the Build-A-Bear brand through our licensed products. I think of kids anticipating, you know, oh my gosh, we're going to Build-A-Bear today.

This is going to be awesome. They don't know exactly what product they're going to pick or what furry friend, I should say. That's the way they thinking about it and then you have collectors and then you have the caregivers that are there to be like oh my gosh i can wait to see their face you know when there stuff in that bear doing that heart ceremony So it is it is really this cool arc And again I humbled and honored to to continue this amazing brand that become a big part of pop culture.

It really has. So obviously, you know, you speak about wanting to remain true to the brand's core values. But similarly, there's also, the opportunity for reinvention, right? You don't want to stand still and not have that forward thinking mindset as well.

So as you see where you are now, but also the opportunity for reinvention, what comes to mind for you, Chris, where can this brand go? Yeah, that's exactly right. I mean, you can never stand still in this world. Everybody wants new, they want different.

They also want that tradition. They want those things that they hold near and dear. So it's that balance of making sure that our experience is true to what we've done, but adding new elements. And I will tell you, we're very excited about our new multi-level store in Orlando, Florida, in Icon Park.

This will be the largest Build-A-Bear store that we have anywhere in the world. And this store will be a showcase for new experiences, new innovations. We You will have the first of its kind anywhere design studio. This design studio in Orlando at our Icon Park store, you'll actually be able to go in, pick out the type of animal.

It could be a bear. It could be a cat. It could be a bunny. You'll pick out the fur, the fur color.

You'll pick out the eye color. You can do different arms and legs. You can do all these sort of things. So it will truly be a one-of-a-kind design.

And then they'll be sewn right on site. So this is an example of moving that Build-A-Bear experience to another level from going into our stores and the magic of stuffing that bear and putting a heart ceremony to actually creating your own design, your own Build-A-Bear. So it'll be sewn together there. Then you will stuff it.

You'll go through that. You can still put a sound in, a scent in. You'll also have personalization with embroidery and then be able to dress. So that's one example of moving the experience forward.

And I think it's going to be just unbelievable. You mentioned that it's going to be piloted at the Icon Park location in Orlando. Is that in your mind, something scalable across multiple locations for Build-A-Bear? Yeah, what we'll look at there, there's other unique experience that'll be there.

We'll have a scent bar. As you know, now you can put scents in our bears, but there'll be a way to personalize what scent you want in your bear. So that's one example. We'll have an elevated hear me experience.

one of the big differentiators with Build-A-Bears, being able to put your own voice and message in the bears. So that'll be another enhancement to the way that happens in our stores. And then also Build-A-Bear Bake Shop. So you'll be able to design and create cupcakes and cookies in the Build-A-Bear Bake Shop.

So these will be really fun. Scaling those out to other locations, this will be an ability where we can look at those experiences, what our customers really respond to, and then how we can scale those in different opportunities within our current locations or as we look at the next generation of store design. So you think about, and we mentioned kind of the turnaround in the business. As CEO, what were some, in your opinion, the most important strategic decisions behind that turnaround?

What kind of helped drive that turnaround? Yeah, thanks, Joe. So it really was, we had to make sure that our stores, you first look at your stores and you look at the profitability of those stores. And there's a combination of things that are in there.

Those are from leases to how the stores are set up and all those different elements. So that was the most important thing. You know, our store business is the largest part, obviously, of our revenue stream. So that had to be stabilized and that had to be able to put in place.

The next part was really where could we move the brand? So, you know, we were in the top malls. We were in great places. But where could the brand move?

And that's what's unique about ours. So then we did what we called partner operated. We are now in every Great Wolf Lodge. We're on every carnival cruise ships.

We're in some of the beaches resorts. So that model really allowed the brand to do what we say, go to more people and more places for more occasions. It was ability to see that this brand is stretchable outside of the mall. What we saw in our own stores was that tourist locations would outperform.

So then you look at these ultimate tourist locations where you have new people all the time coming through. And Build-A-Bear is that ultimate memory experience. It's that ultimate souvenir because when you get home, you remember that trip on Carnival Cruise Line. You remember that trip to Great Wolf Lodge or like a beaches resort.

So that really expanded the brand from that standpoint. We then were able to capitalize on that and be able to do this in our international location. So again really this focus of more people more places more occasions is a way that we able to do that and adapt the brand in our store formats There was a time when we really only had one store format The store had to be X amount of size We had one stuffer And if it didn fit in that particular size even though it was a great opportunity, we would pass.

What we did was develop what we called a kit of parts, where now we have several different types of sizes of stuffers. We have several different store kits that can go into all these different types of locations. So you mentioned more people, more places, more occasions. We've talked about kind of the build out of the physical places, the store locations.

I want to touch on the more people piece and specifically your customer. So in the research for this, it was brought to my attention that teens and adults now account for roughly 40% of Build-A-Bear sales, about double their share from seven years ago. So with that in mind, how is Build-A-Bear thinking about successfully broadening its audience without losing that core connection with obviously kids and families, parents, grandparents, those, you know, core customers, but also thinking about teens and adults now to bring them into the fold.

Yeah, I think that's one of the things that one of those stats that people like, wow, I didn't really think about that, you know, but this, you know, roughly 40% teens, tweens and adults. So that's one. Adults are really can be two ways. We have a lot of great license partners, whether that be Star Wars or Pokemon or Sanrio.

There's this whole phrase of conducting, and we're able to really capitalize on that where people want to remember back. They want to harken back to where they were and collectability in those areas. And we have some of those, you know, the best licenses of those products. You know, Pokemon has all kinds of characters, and people want to do that.

Harry Potter bears, you know, you remember reading those books, and then you want to be able to have that. So that's the way we capitalized as well as our own product. People coming in and taking advantage. We introduced a vault collection with our 25th anniversary where we brought products out from our vault.

We're going to start that again this year as we embark on our 30th anniversary. And people are like, oh my gosh, I remember that when I was a kid. I want to be able to do that. So that's really the way that happens.

And then there's a period where you were at Build-A-Bear when you were young, then you're kind of too cool. And then you want to come back with your best friend. and you want to do those things. We have kids that do prom proposals, homecoming proposals with Build-A-Bear because of that record your voice feature.

So that gets into that high school and those teens and tweens and they come in. And then of course, you know, we always want to be tried and true to our three to six age group, you know, that three-year-old on up and then younger with birthdays, all occasions and just that amazing moment when parents see their children having such a great time at Build-A-Bear. So I will tell you, it is difficult because now you're looking at all these different consumer segments. So when we're building a line, you've got to think about all these consumer segments, how you anniversary those, how you're topical, how you're in the pop culture moment, but how we never stray away from our core consumer.

It's probably a good lead into what I wanted to ask next, Chris, in terms of the experience. And to your point, you've got many different segments of customers, but that in-store experience needs to be relevant and personalized and create that experience for each one of those segments. So how do you think about kind of the evolution of the store model and where you're going, given that you're covering so many different customers? Yeah, I think that's really it.

I mean, you look at the Choose Me wall and you see these different elements, you know, your Pokemon characters and you'll have our tried and true bears and Paulette, our bunny. They don't have our trend product. You know, as we move into the Halloween season here, we launched our Halloween product and our poseable bat and our spider have just been incredible. So those are fun elements.

So it really is this arc of looking at. Then you've got the ability as we move through the store, whether that's taking, you know, what's in the window, what's on our front feature table, what is in our dress me base. You know, we even have NFL licenses. So when the NFL season kicks off, you want to be in that moment when it's May the 4th with Star Wars, you know, we have Star Wars.

So we're really looking at that calendar and then looking at the store and what is front and center. And then what is the theme, you know, holiday, Halloween, Easter, Valentine. So you're looking at all those elements of the store. The idea is really when you walk in a store, it's like, oh my gosh, look at that.

Oh, but what about that? Oh, I didn't see this. So that's the ability we want to have. So if you're a child, you're going to look at the store differently than you might be a teen, tween, or an adult, but we want to be able to have those wow moments in every part of the store.

So something that I want to follow up on, you've noted a couple of times, Chris, is some of these partnerships that Build a Bear Workshop is engaged in. And this is, you know, you're expanding it through your e-commerce, digital entertainment. You know, you've signed partnerships with things such as Harry Potter, Star Wars. You're called out Hello Kitty, another example.

So how do you think about deciding one which partnerships are worthy of investment and two kind of how you distribute and think about where you engaging people through those partnerships you know specifically the channels in which you're reaching them. There's no question. I mean, we're very fortunate that, you know, we have great relationships with our licensed partners. So it really goes back to what we talked before, where are we looking at our consumer segments And how are we providing products and licenses and stories and memories to those different segments, whether that be Sanrio, whether that be Star Wars?

And then how do we look at what's happening in the world? Is there a movie coming out? You know, is there now a streaming episode? You know, Harry Potter is going to launch in the back half of in the fourth quarter.

So you're looking at all those elements because we want to be relevant in pop culture. We want to look at what is happening in the world through entertainment. And are we able to participate that in our different consumer groups? So sometimes we do have to walk away from a license because we may say there's too many in this one year.

And so what do we believe are going to be the best for our guests? And unfortunately, you can't always have everything, but we want to make sure that we're hitting all those tops. You know, and sometimes when a movie is way out, you got to have an understanding of what you believe is going to be the hits for those different consumer groups. Yeah.

Some of that forecasting as to what's going to really resonate. So I'll wrap up with this, Chris. As CEO of a major retail company, you don't need to be told how volatile the environment is, right? There's things such as, obviously, the evolution of consumer behavior, but technology, we haven't even really talked about AI, how that's influencing consumer behavior and operations within retail organizations.

We have tariffs. So there's all these different external factors that are really outside of your independent control, but you have to operate in that space. So thinking about kind of the future for Build-A-Bear Workshop, how do you kind of try to position the business to thrive in this landscape where each day something potentially different is happening, right? There's so many different things that can pop up.

Yeah, Joe, you listed a lot of them there. That's for sure. And when you do it all at once, sometimes you can be like, oh, my goodness. It could be daunting.

It is. First of all, you've really got to stay focused of what's in your control. You've got to stay focused of what's in your control. And that is our great guest experience.

That is our stores, our e-comm site. How are we meeting our customers' needs and how can we do that? Then you've got to be able to look at these things that are out of your control and say, are there opportunities within these things that are happening? How can we best navigate these different, you know, out of control things that are happening in the environment?

You know, because you can't always control those, but you can control how you react to them. And that's the best way that I would say that we try to manage through this. Guess first, experience first, what's in our control. How do we respond to what's out of our control?

How do we do the best job we possibly can forecasting? I think the word that, you know, nobody likes in business or in our lives is uncertainty. And uncertainty really does cause you to take pause moments. But you've got to rely on the past.

I think it's one of the great things about us being a 30-year-old company is we've had these types of things happen to us. And having a consistency in our leadership and being able to say, okay, how did we respond? What were the learnings from this and how we can apply it? No one situation is exactly the same, but there are lessons and learnings that you can apply to those.

So that's the filters that we try to go through navigating these uncertain waters. Yeah. And it can certainly lead to opportunity as well, right? So the ability, to your point, Chris, the ability to be nimble and respond quickly can generate opportunity.

Yeah. I would say, you know, one of the good examples of that really was when there was all this concern about malls and how malls were going to respond. The opportunity was for us to, okay, how stretchable is the brand? That led us to all these other opportunities that I talked about.

And then how can you reinforce your e-com business? How can you do these different areas? So it is that formula that you've got to rely on. Well, I've really enjoyed the opportunity to have a conversation today with Chris Hurt.

Chris, again, is the CEO of Build-A-Bear Workshop. I want to thank you for being on the show today, Chris. I've enjoyed it. Joe, thank you very much.

I appreciate it and look forward to opportunities in the future. Thank you. Thanks for listening. For more information on this podcast, please go to mytotalretail.

com slash podcast for show notes. Total Retail Talks is available on Apple Podcasts, Spotify, Amazon Music, SiriusXM's Pandora, YouTube, and YouTube Music. If you've enjoyed this episode, please take a few moments to rate, review, and subscribe. Thanks, and until next time, this has been Total Retail Talks.