Good morning! Michelle Obama makes a plea to voters, Waymo raises new funding, and Build-A-Bear taps millennial nostalgia and parents looking for less screentime to reach new business highs. Enjoy your Monday!
- Beary good. Have you been into a Build-A-Bear store or on the brand's website recently? The 27-year-old retailer of customizable stuffed animals has quietly become an industry success story through a strategy that combines its classic kids' activity with millennial nostalgia and pop culture trends.
Sharon Price John, Build-A-Bear's CEO of 11 years and an alum of Mattel and Hasbro, outlined her strategy with me during an onstage interview at the retail conference Shoptalk Fall last week.
Build-A-Bear has built up its business in part by reaching more teens and adults, who now make up 40% of its customers. Like a Barbie doll, its plushies feature collaborations and trends from Pokémon and Mothman to Harry Potter and the new Wicked movie; some of those pull double duty to woo nostalgia-inspired adult shoppers who now bring their kids to celebrate major moments like a soccer win or successful report card. Build-A-Bear also intentionally targeted adults with adults-only Valentine's Day collections, including a "zaddy" plushie. "It's an adult-to-adult gift," Price John says. "That equity we've accumulated over almost three decades allows us to go in so many directions now because those kids have grown up and they still love Build-A-Bear."
For Build-A-Bear's traditional customer—kids—the chain called an inventor of experiential retail is now seen by many kids and parents as a welcome respite from screentime. "It's usually, 'Hey, Mom, we want to go to Build-A-Bear.' It doesn't take a lot of nagging," CEO Sharon Price John says of parents' willingness to take their kids to create a new "furry friend," which can range from about $19 to $98 for giant stuffed animals. And while Gen Alpha may be known for growing up fast—see: Sephora tweens—stuffed animals still hold appeal, especially special collaborations that come with "social currency" and are fun to share on TikTok and Instagram.
Those strategies have coalesced to allow Build-A-Bear to find a new level of success. (And with success comes competition: The retailer faces a lawsuit from plush toys competitor Squishmallows.) The company's stock is up 14% this year and recently hit a record high; it had $486.1 million in 2023 revenue. All of its 525 physical stores are now profitable, up from 80% about a decade ago, and they have an 85% "capture rate" of customers' information after they enter the store—a stat that wows the retail world and that Price John credits to the brand's warm-and-fuzzy feeling. "It's easy to capture the data when you had a fabulous time—you just built a furry friend for life," Price John says. "It's a much more dynamic relationship that you're creating."
The company is unique in the retail world in that the holiday season isn't an especially big time for its stores—turns out families are more likely to visit the chain for birthdays.
Emma Hinchliffe
emma.hinchliffe@fortune.com
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