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Analyst: Build-A-Bear needs to repair damage caused by promotion snafu

With much higher than anticipated demand for its “pay your age day” promotion, Build-A-Bear Workshop has become a victim of its own success. The decision to shut stores and end the promotion early was necessary on both safety and operational grounds, but it will damage the brand.

A lot of parents are now upset that they cannot fulfill promises to their children, and many who made special trips to malls are frustrated that their efforts have come to nothing. In our view, Build-A-Bear is going to have to take some action to remedy this, maybe by offering deals and special offers to those affected. This could have a future impact on profits, although it will be helpful to sales volumes.

The good news is that the high demand indicates that the Build-A-Bear concept remains relevant and popular. While the company needs to plan future promotions far better, there is seemingly an opportunity to stimulate sales with the right deals and offers. But first, Build-A-Bear needs to get its alienated customers back on side.

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