Dive Brief:
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New Build-A-Bear CEO Sharon Price John's changes over the last two years are paying off, CNBC reports. John has been willing to close underperforming stores, from 442 to 395, and make big changes to others including adding more products for boys and more high-profile licenses. Although licenses bring 30% of the company's revenue, Q1 sales in the category increased 170% year over year.
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John noticed that many of the chain’s best customers are tourists— more than half come from more than 50 miles away — and is locating new stores and orienting existing stores to accommodate that, noting that tourists are often in a different "spending frame of mind."
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And the retailer’s toy-building machine has gone from an in-store necessity to an attraction of its own, so that kids can enjoy the spectacle of their toys being made.
Dive Insight:
Sometimes a faltering retailer needs leadership willing to make changes, and these brought on by CEO Sharon Price John, while significant, are based on good observation. They’ve paid off — the chain says it has returned to profitability. The retailer has gone from a loss of $49 million in 2012 to a profit of $14 million last year, and in its Q2 report Wednesday expects to report its 10th straight improved quarter.
"She achieved the holy grail of retail," said Gerrick Johnson, BMO Capital Markets toy analyst, told CNBC. "She got people to buy more and buy more at a higher price."
