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Build-A-Bear Workshop: Revving for New Success with Ridemakerz
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Wednesday, June 13, 2007
The past year hasn't been the best for one of my favorite retailers, Build-A-Bear Workshop (NYSE:BBW), the make-your-own-stuffed bear retail phenomenon. BBW currently is one of the most shorted stocks out there.
Sure, I agree that it may have expanded to its max in the U.S. Same store sales are dropping and it hasn't been able to find another hit concept to spur growth. BBW tried a store geared a bit older -- Friends-to-B-Made, which in my opinion is creepy (stuffing a human doll) plus the dolls are not unique looking, and the stores I've seen are empty. It also tried a build your own dinosaur store, which hasn't bit yet.
But I've never written this company off. Its core concept is sound and works. And then there's the more recent news that may hold the key to a bigger future. BBW has just put a fairly significant investment in a new retail concept called Ridemakerz, where instead of building a bear, kids get to build their own toy car.
I love this idea. First, making a car is an organic application -- in real life, you build a car (in real life, you don't build a bear!). Second, this has the ability to capture that elusive boy sector. And the dad sector too.
From picking a body, to a chassis (remote control or free wheel), to sound chips, to wheels, rims, spoilers and other custom parts, kids can build and "trick out" their own cars (with apparently over 649,000,000 possible combinations, not including the countless ways to design with stickers). At the end, they register their car, get a certificate and the car then gets its own cool cardboard toolbox carrying case.
Ridemakerz smartly has made a hip, cool, fun product, but at its heart it is educational and family-friendly. Its site also shows that it is dedicated to teaching kids about environmentally conscious fuels. Readers of my blog know how good I feel about this!
Reports from the first store that just opened in Myrtle Beach, FL makes me think it's done an amazing job executing the concept and that it is poised to take off. Customers can also customize their own car online and have it shipped to them.
BBW has made an equity investment of $2.96 million and has indicated that by early next year, it will have a 34% stake in Ridemakerz. Additionally it's offering over $15 million in back-office support, giving this start-up a significant boost. July will bring a second store in Mall of America, and it plans to open four stores in 2007.
BBW's CEO Maxine Clark said in a St Louis newspaper interview, "...our plan is, if it (Ridemakerz) is successful, that we would ultimately ... buy the company." Things look promising for Ridemakerz, and this should provide a terrific boost to BBW stock down the road.
Type of stock: A build-your-own stuffed bear retail chain that has made an equity investment and providing back office support to a new build-your-own-car retail concept, Ridemakerz, targeted at dads and sons (and daughters) and poised to succeed.
Price target: Currently trading at $30.18, I am bullish on BBW due to the significant stake in Ridemakerz, and think if the store concept succeeds, it will provide BBW with a huge new growth vehicle and we could see this rev its way into the $40 range within 12 months.
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Build-A-Bear Workshop: Revving for New Success with Ridemakerz
Sure, I agree that it may have expanded to its max in the U.S. Same store sales are dropping and it hasn't been able to find another hit concept to spur growth. BBW tried a store geared a bit older -- Friends-to-B-Made, which in my opinion is creepy (stuffing a human doll) plus the dolls are not unique looking, and the stores I've seen are empty. It also tried a build your own dinosaur store, which hasn't bit yet.
But I've never written this company off. Its core concept is sound and works. And then there's the more recent news that may hold the key to a bigger future. BBW has just put a fairly significant investment in a new retail concept called Ridemakerz, where instead of building a bear, kids get to build their own toy car.
I love this idea. First, making a car is an organic application -- in real life, you build a car (in real life, you don't build a bear!). Second, this has the ability to capture that elusive boy sector. And the dad sector too.
From picking a body, to a chassis (remote control or free wheel), to sound chips, to wheels, rims, spoilers and other custom parts, kids can build and "trick out" their own cars (with apparently over 649,000,000 possible combinations, not including the countless ways to design with stickers). At the end, they register their car, get a certificate and the car then gets its own cool cardboard toolbox carrying case.
Ridemakerz smartly has made a hip, cool, fun product, but at its heart it is educational and family-friendly. Its site also shows that it is dedicated to teaching kids about environmentally conscious fuels. Readers of my blog know how good I feel about this!
Reports from the first store that just opened in Myrtle Beach, FL makes me think it's done an amazing job executing the concept and that it is poised to take off. Customers can also customize their own car online and have it shipped to them.
BBW has made an equity investment of $2.96 million and has indicated that by early next year, it will have a 34% stake in Ridemakerz. Additionally it's offering over $15 million in back-office support, giving this start-up a significant boost. July will bring a second store in Mall of America, and it plans to open four stores in 2007.
BBW's CEO Maxine Clark said in a St Louis newspaper interview, "...our plan is, if it (Ridemakerz) is successful, that we would ultimately ... buy the company." Things look promising for Ridemakerz, and this should provide a terrific boost to BBW stock down the road.
Type of stock: A build-your-own stuffed bear retail chain that has made an equity investment and providing back office support to a new build-your-own-car retail concept, Ridemakerz, targeted at dads and sons (and daughters) and poised to succeed.
Price target: Currently trading at $30.18, I am bullish on BBW due to the significant stake in Ridemakerz, and think if the store concept succeeds, it will provide BBW with a huge new growth vehicle and we could see this rev its way into the $40 range within 12 months.
hilaryonstocks at 1:52:00 PM EDT Blog about this entry |
Add to del.icio.us | digg this
6/15/07 10:21 AM