ST. LOUIS (KMOV.com) – Thirty Build-A-Bear stores will be closing.
Thursday, the St. Louis-based company announced dozens of stores would be closing because of declining sales.
KMOV reached out to a company spokesperson who said the stores will close over the next two years. The spokesperson did not say if any local stores would be closing but did say more than half of the closures would happen outside of North America.
Below are the comments from Sharon Price John, President and Chief Executive Officer of Build-A-Bear Workshop:
The shopping patterns and habits of today's families are clearly, rapidly changing. Online shopping is on the rise and the mall is no longer the ubiquitous go-to place for family fun and entertainment. As such, both the amount of traffic and the composition of traffic going to malls has changed significantly in recent years. Although not all malls are created equal and we expect to continue to successfully operate in a meaningful number of these locations, overall mall traffic is estimated to have declined nearly 50% in the past five to six years. And data indicates that shoppers are less likely to take children with them to the mall, even in the critical holiday timeframe, which was once considered a reliable tradition.
Because we recognize this changing retail dynamic several years ago, we began proactively pivoting our business model, to include a broader offering of retail locations that attract families. We also began aggressively developing a variety of new lower capital, flexible formats, like concourse shops to navigate the market volatility. Our goal was to provide creative solutions for efficiently entering new non-traditional retail areas, while simultaneously securing significant mall lease optionality with the negotiation of favorable rent deals and short-term extensions, which would have resulted in now having over 60% of our leases coming up for renewal in the next two to three years.
We currently expect to close up to 30 stores over the next two years, with about half of those outside of North America. We strongly believe that this lease optionality along with the fact that Build-A-Bear’s experiential retail offering is widely considered to be more a part of the solution than part of the problem, should provide us with additional favorable opportunities in the future.